EXHIBIT 10.23
GENETRONICS BIOMEDICAL CORPORATION PRIVATE PLACEMENT AGENCY AGREEMENT
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THIS AGREEMENT dated for reference November 1, 2001, is made
BETWEEN
GENETRONICS BIOMEDICAL CORPORATION, a corporation incorporated
under the laws of the State of Delaware, having an office at
00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000
(the "Issuer");
AND
CANACCORD CAPITAL CORPORATION, of 2200 - 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Agent").
WHEREAS:
A. The Issuer wishes to privately place with purchasers an aggregate
of 5,212,494 Special Warrants;
B. The Issuer wishes to appoint the Agent to act as agent in the
sale of the Special Warrants, and the Agent is willing to accept such
appointment on the terms and conditions of this Agreement;
THE PARTIES to this Agreement therefore agree:
1. DEFINITIONS
In this Agreement and the Recitals hereto:
(a) "Administration Fee" has the meaning defined in Subsection
6.7(b);
(b) "Agent's Fee" has the meaning defined in Section 6
(c) "Agent's Series "A" Special Warrants" means the special warrants
issued to Canaccord Europe as the Corporate Finance Fee and as
further described in Section 6;
(d) "Agent's Series "B" Special Warrants" means the special warrants
issued to the Agent as part of the Agent's Fee and as further
described in Section 6;
(e) "Agent's Shares" means the common shares of the Issuer issued to
Canaccord Europe upon exercise or deemed exercise of the Agent's
Series "A" Special Warrants;
(f) "Agent's Special Warrants" means the Agent's Series "A" Special
Warrants and the Agent's Series "B" Special Warrants;
(g) "Agent's Warrants" means the share purchase warrants issued to
the Agent upon exercise of the Agent's Series "B" Special
Warrants;
(h) "Agent's Warrant Shares" means the common shares of the Issuer
issued to the Agent upon the exercise of the Agent's Warrants;
(i) "Applicable Legislation" means the U.S. Securities Act and the
securities legislation of those Canadian provinces where the
Securities are offered and sold which may include one or more of
the Securities Act (Alberta), the Securities Act (B.C.), and the
Securities Act (Ontario), together with the regulations and rules
made and promulgated thereunder and all administrative policy
statements, blanket orders and rulings, notices, and other
administrative directions issued by the Commissions;
(j) "Canaccord Europe" means Canaccord Capital (Europe) Limited, a
subsidiary of the Agent;
(k) "Closing" means the day that the Special Warrants are issued to
Purchasers;
(l) "Commissions" means the Alberta Securities Commission, the B.C.
Securities Commission, and the Ontario Securities Commission, as
applicable, and the SEC;
(m) "Corporate Finance Fee" means the corporate finance fee granted
to the Agent in accordance with Subsection 6.2;
(n) "Escrowed Funds" has the meaning defined in Section 3;
(o) "Exchanges" means the Toronto Stock Exchange and the American
Stock Exchange;
(p) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended;
(q) "Exchange Policies" means the rules and policies of the
Exchanges;
(r) "Exemptions" means the statutory exemptions whereby the
distribution of the Special Warrants may be effected without the
requirement of compliance with the prospectus or registration
requirements of the Applicable Legislation and without delivery
of an offering memorandum:
(i) with residents of Alberta, British Columbia and Ontario,
as applicable, where the distribution takes place in
accordance with sections 65(1)(e) and 107(1)(d) of the
Securities Act (Alberta), sections 45(1)(5) and 74(2)(4)
of the Securities Act (B.C.) and sections 35(1)(5) and
72(1)(d) of the Securities Act (Ontario);
(ii) with non-residents of Canada where reasonable steps are
taken by the Issuer and the Agent to ensure that the
Special Warrants and the Shares, Warrants and Warrant
Shares issuable on conversion of the Special Warrants or
exercise of the Warrants, as the case may be, come to rest
outside of Canada in accordance with the Interpretation
Note to former Ontario Securities Commission Policy 1.5
and British Columbia Securities Commission Instrument
72-503; and
(iii) where the distribution takes place in accordance with
Regulation D or another applicable exemption from
registration under the U.S. Securities Act;
(s) "Filing Deadline" means the day the subscription forms and other
documentation in connection with the Private Placement is
required to be filed with the Exchanges, or any extension
thereof;
(t) "General Solicitation" and "General Advertising" mean "general
solicitation" and "general advertising", respectively, as used in
Rule 502(c) under Regulation D;
(u) "Material Change" has the meaning defined in the Securities Act
(Ontario);
(v) "Material Fact" has the meaning defined in the Securities Act
(Ontario);
(w) "Misrepresentation" has the meaning defined in the Securities Act
(Ontario);
(x) "Monthly Agent's Fee" has the meaning defined in Subsection
6.7(a);
(y) "Private Placement" means the offering of the Securities on the
terms and conditions of this Agreement;
(z) "Prospectus" means a preliminary and final prospectus, including
any amendments made thereto, filed with the Alberta, B.C. and
Ontario Securities Commissions, as applicable, and for which a
final receipt is issued by the Alberta, B.C. and Ontario
Securities Commissions, as applicable;
(aa) "Public Record" means all documents filed by the Issuer with the
Commissions pursuant to the prospectus, continuous disclosure and
proxy solicitation requirements of the Applicable Legislation,
including without limitation all press releases, material change
reports, annual reports, prospectuses and financial statements;
(bb) "Purchaser" means a purchaser of the Special Warrants, and may
include the Agent in accordance with the terms of this Agreement;
(cc) "Qualification Date" means the later of the day on which final
receipt for a Prospectus is issued by the Alberta, B.C. and
Ontario Securities Commissions and the day on which the
Registration Statement is declared effective by the SEC;
(dd) "Qualification Deadline" means the the close of business on that
day which is the first business day 90 days immediately following
the Closing;
(ee) "Registrable Securities" means the Shares, the Warrant Shares,
the Agent's Shares and the Agent's Warrant Shares;
(ff) "Registration Expenses" shall mean all expenses incurred by the
Issuer in complying with Section 12A, including, without
limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of legal
counsel for the Issuer, fees and disbursements of one special
legal counsel for the selling shareholders with respect to the
Registration Statement, exchange listing fees, NASD fees, blue
sky fees and expenses, and the expense of any financial audits
incident to or required by any such registration (but excluding
the compensation of regular employees of the Issuer, which shall
be paid in any event by the Issuer);
(gg) "Registration Statement" means the registration statement on Form
S-3, or such other form as may be available to the Issuer, to be
filed with the SEC and which is declared effective in connection
with the registration of the Registrable Securities pursuant to
Section 12A;
(hh) "Regulation D" means Regulation D promulgated under the U.S.
Securities Act;
(ii) "Regulatory Authorities" means the Commissions and the Exchanges;
(jj) "SEC" means the United States Securities and Exchange Commission
and any successor federal agency having similar powers;
(kk) "Securities" means the Special Warrants, the Shares, the Warrants
and the Warrant Shares, the Agent's Series "A" Special Warrants,
the Agent's Series "B" Special Warrants, the Agent's Shares, the
Agent's Warrants and the Agent's Warrant Shares;
(ll) "Securities Act (Alberta) means Securities Act, R.S.A. 1981, c.
S-6.1, as amended;
(mm) "Securities Act (B.C.)" means Securities Act, R.S.B.C. 1996, c.
418, as amended
(nn) "Securities Act (Ontario)" means the Securities Act, R.S.O. 1990,
c. S.5, as amended;
(oo) "Selling Jurisdictions" means the jurisdictions where the
Securities are offered and sold, and may include one or more of
the United States, Alberta, British Columbia, and Ontario and
certain offshore jurisdictions outside of Canada and the United
States;
(pp) "Shares" means previously unissued common shares in the capital
of the Issuer, as presently constituted, to be issued upon the
exercise or deemed exercise of the Special Warrants;
(qq) "Special Warrant Certificates" means the certificates
representing the Special Warrants;
(rr) "Special Warrants" means the special warrants of the Issuer
subscribed for and issued to the Purchasers under the Private
Placement;
(ss) "Subsidiary" means Genetronics, Inc.;
(tt) "Trustee" has the meaning set out in Subsection 3.1;
(uu) "USD" means United States dollars;
(vv) "U.S. Securities Act" means the United States Securities Act of
1933, as amended;
(ww) "Warrants" means the share purchase warrants of the Issuer issued
to Purchasers upon the exercise or deemed exercise of the Special
Warrants; and
(xx) "Warrant Shares" means the common shares of the Issuer issued to
Purchasers upon the exercise of the Warrants.
2. PURCHASE OF SPECIAL WARRANTS
Subject to the terms and conditions of this Agreement, the Agent agrees to offer
on behalf of the Issuer, and the Issuer agrees to issue and sell to the
Purchasers 5,212,494 Special Warrants for a consideration of USD 2,345,622.30
(USD 0.45 per Special Warrant). In the event that less than all such Special
Warrants are sold to Purchasers, the Agent will purchase the remainder.
3. ESCROWED FUNDS
3.1 On Closing, 20% of the gross proceeds received from the sale of
the Special Warrants will be placed into escrow (the "Escrowed Funds") with the
transfer agent of the Issuer, or an alternate trustee as reasonably agreed
between the Issuer and the Agent (the "Trustee"), in accordance with the terms
of a trust indenture to be entered into between the Issuer and the Trustee,
satisfactory in form and substance to the Agent.
3.2 The Escrowed Funds will be released by the Trustee from escrow
and paid as follows:
(a) to the Issuer on the Qualification Date if such date occurs prior
to the Qualification Deadline; or
(b) subject to Subsection 4.2(d), to holders of Special Warrants on
the first business day following the Qualification Deadline if
the Qualification Date has not occurred.
4. THE SPECIAL WARRANTS
4.1 The Special Warrant Certificates will be satisfactory in form and
substance to the Agent.
4.2 The Issuer covenants with the Agent, and the Special Warrant
Certificates will provide, among other things, that:
(a) the Special Warrants will be issued and registered in the names
of the Purchasers or their nominees;
(b) each Special Warrant will entitle the holder to acquire one Share
and one-half of a Warrant, without payment of further
consideration, on the exercise or deemed exercise of the Special
Warrant;
(c) each Special Warrant may be exercised by the holder in whole or
in part at any time after the Closing and all unexercised Special
Warrants will be deemed to be exercised on that day which is the
earlier of:
(i) one year from the Closing; and
(ii) the fifth business day after the Qualification Date;
(d) if the Qualification Date does not occur by the Qualification
Deadline and if the holder of the Special Warrant has provided to
the Issuer all of the information required of the holder by the
Issuer, within a reasonable time period of the Issuer's request,
to permit the Issuer to file the Registration Statement, then the
Escrowed Funds will be repaid to the holder of the Special
Warrant on a pro rata basis;
(e) upon exercise or deemed exercise, the Special Warrants will be
automatically cancelled and will have no further force or effect;
(f) subject to the Applicable Legislation and the Exchange Policies,
the Special Warrants will not be transferable, except by the
Agent in accordance with the terms of the subscription agreement
entered into between the Issuer and the Agent;
(g) there will be an appropriate adjustment in the class and number
of Shares issued upon exercise or deemed exercise of the Special
Warrants upon the occurrence of certain events, including any
subdivision, consolidation or reclassification of the Issuer's
common shares, the payment of stock dividends and the merger of
the Issuer; and
(h) the Issuer will use its best efforts to remain a "reporting
issuer" in British Columbia and Ontario, not in default of
Applicable Legislation therein, for one year from the date of the
Closing.
4.3 The issuance of the Special Warrants will not restrict or prevent
the Issuer from obtaining any other financing, or from issuing additional
securities or rights prior to the exercise or deemed exercise of the Special
Warrants.
5. THE WARRANTS
5.1 The Warrants will be issued and registered in the name of the
Purchasers or the nominee in whose name the Special Warrants were issued.
5.2 The right to purchase a Warrant Share under a Warrant may be
exercised at any time until the close of business on the day which is 18 months
from the applicable Closing.
5.3 One whole Warrant will entitle the holder, on exercise, to
purchase one Warrant Share at a price of USD 0.75 per Warrant Share.
5.4 The Warrants will be non-transferable, except by the Agent in
accordance with the Applicable Legislation and the Exchange Policies.
5.5 The certificates representing the Special Warrants will, among
other things, include provisions for the appropriate adjustment in the class,
number and price of the Warrant Shares issued upon exercise of the Warrants upon
the occurrence of certain events, including any subdivision, consolidation or
reclassification of the Issuer's common shares, the payment of stock dividends
and the merger of the Issuer.
5.6 The issue of the Warrants will not restrict or prevent the Issuer
from obtaining any other financing, or from issuing additional securities or
rights, during the period within which the Warrants may be exercised.
6. AGENT'S FEE
6.1 In consideration of the services performed by the Agent under
this Agreement, the Issuer agrees to pay to the Agent an Agent's Fee consisting
of the following:
(a) a cash payment equal to 7.5% of the gross proceeds received by
the Issuer from the sale of the Special Warrants on the Closing,
payable in lawful money of the United States; and
(b) that number of Agent's Series "B" Special Warrants equal to 10%
of the number of Special Warrants sold at the Closing.
6.2 The Issuer will also pay to Canaccord Europe on the Closing a
corporate finance fee consisting of 100,000 Agent's Series "A" Special Warrants.
6.3 Each Agent's Series "A" Special Warrant will be convertible into
one Agent's Share for no additional consideration.
6.4 Each Agent's Series "B" Special Warrant will be convertible into
one Agent's Warrant which will entitle the Agent to purchase one Agent's Warrant
Share at USD 0.45, for a period of 18 months from the applicable Closing.
6.5 Except as set out in Subsections 6.3 and 6.4, the Agent's Series
"A" Special Warrants and the Agent's Series "B" Special Warrants will have the
same terms as the Special Warrants as set out in Sections 4.2(c), (e), (f) and
(g).
6.6 The Agent acknowledges that the certificates representing the
Agent's Series "A" Special Warrants, the Agent's Series "B" Special Warrants,
the Agent's Shares and the Agent's Warrants will be endorsed with only the
following legends
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
HOLD PERIOD AND MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL 12:01
A.M. ON [DATE FOUR MONTHS AND ONE DAY FROM CLOSING], IN ONTARIO
UNTIL 12:01 A.M. ON [IN THE CASE OF THE SPECIAL WARRANTS AND
WARRANTS, DATE 18 MONTHS AND ONE DAY FROM CLOSING AND, IN THE
CASE OF THE UNDERLYING SHARES, DATE ONE YEAR AND ONE DAY FROM
CLOSING], OR IN ALBERTA UNTIL 12:01 A.M. ON THE DATE THAT IS
TWELVE MONTHS FROM THE DATE THE ISSUER BECOMES A "REPORTING
ISSUER" IN ALBERTA EXCEPT AS PERMITTED BY THE TORONTO STOCK
EXCHANGE AND THE APPLICABLE SECURITIES LEGISLATION IN THOSE
JURISDICTIONS.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER OR ANOTHER APPLICABLE EXEMPTION,
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. DELIVERY
OF THIS CERTIFICATE MAY NOT
CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA.
6.7 As part of the Agent's Fee set out above, the Issuer will also
pay the following:
(a) to Canaccord Europe, USD 5,000 per month for twelve months
following the Closing (the "Monthly Agent's Fee"), payable in
advance on a quarterly basis, the first payment to be made at
Closing and then on the first business day that falls every three
months from the Closing; and
(b) to the Agent, CAD 5,000 as an administration fee (the
"Administration Fee"), to be paid at the Closing.
7. OFFERING RESTRICTIONS
7.1 The Agent, acting on behalf of the Issuer, will sell the Special
Warrants only to persons who represent themselves as being persons:
(a) resident in Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx, jurisdictions
outside of Canada where the Special Warrants may lawfully be
offered for sale, or in the United States;
(b) who are purchasing as principal, or are deemed by law or
discretionary order to be purchasing as principal;
(c) who are qualified to purchase the Special Warrants under the
Exemptions, as applicable; and
(d) who are an "Accredited Investor" as such term is defined in Rule
501 under the U.S. Securities Act as indicated by the completion
of the Certification for Securities Law Compliance attached
hereto as part of Schedule "A".
7.2 The Agent, acting on behalf of the Issuer, will sell the Special
Warrants only in those of the Selling Jurisdictions where it is licensed to sell
such securities or is exempt from licensing or through sub-agents who are
licensed to sell such securities in the Selling Jurisdictions.
7.3 The Private Placement has not been and will not be advertised in
any way.
7.4 No selling or promotional expenses will be paid or incurred in
connection with the Private Placement, except for professional services or for
services performed by a registered dealer.
7.5 Before each Closing, the Issuer and the Agent will take all
reasonable steps necessary to ensure compliance with the Exemptions.
7.6 The Agent will comply with all applicable laws of the
jurisdictions in which it assists in soliciting or procuring subscriptions for
the Special Warrants and will not assist in soliciting or procuring
subscriptions for Special Warrants so as to require the registration thereof or
the filing of a prospectus with respect thereto under the laws of any
jurisdiction.
7.7 Until the Prospectus and the Registration Statement are filed,
neither the Agent nor the Issuer will take any action (a) for the purpose of
preparing the market or creating a demand in Canada or the United States for any
of the Securities or (b) that could be reasonably expected to prepare the market
or create a demand in Canada or the United States for any of the Securities.
8. SUBSCRIPTIONS
8.1 The Agent will use its commercially reasonable efforts to obtain
from each Purchaser, and deliver to the Issuer, on or before the Filing Deadline
duly completed and signed subscriptions in one of the forms attached as Schedule
"A" or in such other form consented to by the Issuer and the Agent and executed
by the Purchaser.
8.2 The Issuer will accept each properly completed subscription
agreement tendered by the Agent, unless:
(a) the subscriber thereunder would, by virtue of the issue of the
shares subscribed for, become a "control person" of the Issuer,
within the meaning of the Applicable Legislation; or
(b) the subscription would be prohibited by the Applicable
Legislation.
9. FILINGS WITH THE REGULATORY AUTHORITIES
9.1 The Issuer will forthwith provide the Exchanges written notice of
the terms of this Agreement and the proposed Private Placement and all other
information required by the Exchange Policies (the "Notice").
9.2 The Issuer will forthwith provide the Agent and its solicitor
with a copy of the Notice, and, forthwith on receipt, a copy of the Toronto
Stock Exchange's conditional approval of the listing on the Toronto Stock
Exchange of the Shares, the Warrant Shares, the Agent's Shares and the Agent's
Warrant Shares to be issued on the conversion of the Special Warrants, Agent's
Series "A" Special Warrants, or Agent's Series "B" Special Warrants, or upon
exercise of the Warrants or Agent's Warrants, as the case may be.
9.3 After the Closing, the Issuer will file all required documents
with, and pay all required filing fees of the Exchanges or the Commissions, as
the case may be, and take all other actions required by the Exchange Policies or
by the Applicable Legislation to fulfil all conditions upon listing imposed by
the Exchanges, or to comply with the Exemptions, with all possible dispatch.
10. CLOSING
10.1 In this Section:
(a) "Certificates" means the Special Warrant Certificates;
(b) "Proceeds" means the gross proceeds of the sale of Special
Warrants on the Closing, less:
(i) the Escrowed Funds;
(ii) that portion of the Agent's Fee payable in cash, including
the first payment of the Monthly Agent's Fee and the
Administration Fee,;
(iii) the expenses of the Agent in connection with the Private
Placement which have not been paid by the Issuer and which
are provided for in this Agreement;
(iv) any amount which has been attached by garnishing order or
other form of attachment; and
(v) any amount paid directly to the Issuer by Purchasers in
connection with the Private Placement; and
(c) "Agent's Certificates" means certificates representing the
Agent's Series "A" Special Warrants and Agent's Series "B"
Special Warrants to be issued at the Closing, as applicable.
10.2 The Closing will take place on Friday, November 23rd, 2001, or on
such other date as reasonably agreed between the Issuer and the Agent.
10.3 The Issuer will, on the Closing, issue and deliver the
Certificates and Agent's Certificates to the Agent or Canaccord Europe, as
applicable, or at the Agent's request, will deliver the Certificates to the
Purchasers, against payment of the Proceeds.
10.4 If instructed to deliver the Certificates to the Purchasers as
set out in Subsection 10.3 above, the Issuer will make all necessary
arrangements for the exchange of the certificates representing the Special
Warrants that were to be delivered to the Agent on the delivery date for
certificates representing such number of the Special Warrants registered in such
names of the Purchasers as the Agent may designate not less than 48 hours prior
to the Closing.
10.5 The Certificates will contain no legends other than the
following:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
HOLD PERIOD AND MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL 12:01
A.M. ON [DATE SIX MONTHS AND ONE DAY FROM CLOSING, IN ONTARIO
UNTIL 12:01 A.M. ON [IN THE CASE OF THE SPECIAL WARRANTS AND
WARRANTS, DATE 18 MONTHS AND ONE DAY FROM CLOSING AND, IN THE
CASE OF THE UNDERLYING SHARES, DATE ONE YEAR AND ONE DAY FROM
CLOSING], OR IN ALBERTA UNTIL 12:01 A.M. ON THE DATE THAT IS
TWELVE MONTHS FROM THE DATE THE ISSUER BECOMES A "REPORTING
ISSUER" IN ALBERTA, EXCEPT AS PERMITTED BY THE TORONTO STOCK
EXCHANGE AND THE APPLICABLE SECURITIES LEGISLATION IN THOSE
JURISDICTIONS.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER OR ANOTHER APPLICABLE EXEMPTION,
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. DELIVERY
OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
10.6 The Agent will deliver the Escrowed Funds to the Trustee at
Closing.
10.7 The Agent will also, on the Closing, deliver to the Issuer an
"all sold" certificate certifying that it has not, to the best of its knowledge,
sold the Securities to residents of Alberta, British Columbia or Ontario, as
applicable, except in strict compliance with, in the case of residents of
Alberta, sections 65(1)(e) and 107(1)(d) of the Securities Act (Alberta), in the
case of residents of British Columbia, sections 45(1)(5) and 74(2)(4) of the
Securities Act (B.C.) and, in the case of residents of Ontario, sections
35(1)(5) and 72(1)(d) of the Securities Act (Ontario).
10.8 Promptly after the Closing, the Issuer will submit to the SEC and
applicable state securities regulatory authorities any and all filings necessary
to make claims of exemption from registration under applicable United States
federal and state securities laws, as applicable, and will deliver copies of
such filings to the Agent and its solicitors.
11. CONDITIONS OF CLOSING
11.1 The obligations of the Agent on the Closing will be conditional
upon the following:
(a) the Issuer having taken all necessary corporate action to be able
to validly create, issue and sell the Securities to be issued at
that Closing and all underlying Shares, Agent's Shares, Warrants,
Warrant Shares, Agent's Warrants and Agent's Warrant Shares to be
issued pursuant to those Securities;
(b) the Issuer having made all necessary filings, if any, and
obtained all necessary approvals, if any, in Alberta, British
Columbia, Ontario and the United States, as applicable, required
before such Closing in order to issue and sell the Special
Warrants to the Purchasers and to ensure that such issuance and
sale will not be subject to the registration and prospectus
requirements of the Applicable Legislation;
(c) the Issuer's outstanding common shares being listed and posted
for trading on the Exchanges;
(d) the Exchanges having confirmed that the Shares and Agent's Shares
to be issued upon the conversion of the Special Warrants and
Agent's Series "A" Special Warrants, as the case may be, and the
Warrant Shares and Agent's Warrant Shares to be issued upon
exercise of the Warrants and Agent's Warrants, as the case may
be, will be listed on the Exchanges subject in each case only to
conditions which by their nature may only be fulfilled after the
Closing;
(e) the Agent being satisfied, in its sole discretion, with the
results of its investigation of the business and affairs of the
Issuer;
(f) the Issuer having delivered to the Agent and its solicitors at
that Closing and each previous Closing (if any) favourable
opinions of the Issuer's solicitors dated as of the date of the
Closing, as to all legal matters reasonably requested by the
Agent relating to the incorporation of the Issuer and its
Subsidiary, their respective businesses and the creation,
issuance and sale of the Securities, satisfactory in form and
substance to the Agent;
(g) the Issuer having delivered to the Agent and its solicitors at
that Closing and each previous Closing (if any) such certificates
of its officers and other documents relating to the Private
Placement or the affairs of the Issuer as the Agent or its
solicitors may reasonably request, satisfactory in form and
substance to the Agent;
(h) each representation and warranty of the Issuer herein being true,
and the Issuer having performed or complied with all of its
covenants, agreements and obligations hereunder;
(i) receipt of all required regulatory approval for or acceptance of
the Private Placement; and
(j) the removal or partial revocation of any cease trading order or
trading suspension made by any competent authority to the extent
necessary to complete the Private Placement.
11.2 The conditions set out in Subsection 11.1 are for the sole
benefit of the Agent and may be waived by the Agent in whole or in part.
12. MATERIAL CHANGES
12.1 If, between the date of this Agreement and the Closing or the
Qualification Date, a Material Change, or a change in a Material Fact occurs,
the Issuer will:
(a) as soon as practicable notify the Agent in writing, setting forth
the particulars of such change;
(b) as soon as practicable, issue and file with the Regulatory
Authorities a press release that is authorised by a senior
officer disclosing the nature and substance of the change;
(c) as soon as practicable file with the Commissions the report
required by Applicable Legislation and in any event no later than
10 days after the date on which the change occurs; and
(d) provide copies of that press release, when issued, and that
report, when filed, to the Agent and its solicitors.
12.2 If the Issuer is uncertain as to whether there has been a
Material Change, or a change in a Material Fact, it will promptly provide the
Agent with full particulars of the event giving rise to the uncertainty, and
will consult with the Agent as to whether such event constitutes a Material
Change, or a change in a Material Fact.
12A. PROSPECTUS AND REGISTRATION STATEMENT
12A.1 The Issuer will use its commercially reasonable efforts to have
the Qualification Date occur on or before the Qualification Deadline. If the
Qualification Date does not occur by the Qualification Deadline, then the Issuer
will continue to use its commercially reasonable efforts to have the
Qualification Date occur no later than one year after the Closing.
12A.2 As soon as possible after Closing, the Issuer will file a
Prospectus with the Securities Commissions of the Selling Jurisdictions in
Canada, for the purpose of qualifying the distribution of the Shares and
Warrants issuable upon exercise of the Special Warrants and, subject to Ontario
securities law, the Agent's Shares and Agent's Warrants issuable upon exercise
of the Agent's Special Warrants in accordance with the Applicable Legislation,
and will use its commercially reasonable efforts to obtain a final receipt
therefor from the Securities Commissions of the Selling Jurisdictions in Canada.
Subject to the timely receipt of information reasonably requested from the
Purchasers in connection with a Registration Statement, as soon as possible
after Closing, but in any event no more than 45 days after the Closing, the
Issuer will file the Registration Statement with the SEC for the purpose of
qualifying the resale of the Shares, the Warrant Shares, the Agent's Shares and
the Agent's Warrant Shares in accordance with the U.S. Securities Act and will
use its commercially reasonable efforts to have the Registration Statement
declared effective by the SEC.
12A.3 The Issuer agrees to keep the Registration Statement continuously
effective for two years from the Closing or until the distribution described in
the Registration Statement has been completed, whichever period is shorter.
12A.4 The form and substance of the Prospectus and the Registration
Statement will be satisfactory to the Issuer and its solicitors and the Agent
and its solicitors, acting reasonably.
12A.5 The Issuer will permit the Agent and its solicitor to participate
in the preparation of the Prospectus and Registration Statement, to discuss the
Issuer's business with its corporate officials and auditors and to conduct such
full and comprehensive review and investigation of the Issuer's business,
affairs, capital and operations as the Agent and its solicitor reasonably
consider to be necessary to establish a due diligence defence under the
Applicable Legislation to an action for misrepresentation or damages and to
enable the Agent to responsibly execute the Agent's certificate in the
Prospectus.
12B. PROSPECTUS
12B.1 The Prospectus will contain a contractual right of rescission in
accordance with Applicable Legislation granted by the Issuer to the Purchasers
for misrepresentations concerning the Issuer in the Prospectus.
12B.2 If (a) the Agent and its solicitor, acting reasonably, are
satisfied that the Prospectus contains full, true and plain disclosure of all
Material Facts relating to the Issuer, its subsidiaries, if any, and the
Securities, and (b) the Issuer has delivered to the Agent the documents
described in this Section to be delivered on the date of the final Prospectus,
then the Agent will make all necessary arrangements to execute the Agent's
certificate in the final Prospectus.
12B.3 On the date of the final Prospectus, the Issuer will deliver the
following documents to the Agent and its solicitor, each of which will be in a
form and substance satisfactory to the Agent and its solicitor:
(a) an opinion of the auditors of the Issuer, dated as of the date of
the final Prospectus and addressed to the Agent, relating to the
accuracy of the financial statements included in the Prospectus
and verification of the accuracy of the financial, numerical and
certain other information disclosed in the Prospectus;
(b) a certificate of the Issuer issued to the Agent and its
solicitor, dated as of the date of the final Prospectus and
executed by the President of the Issuer or by another officer
approved by the Agent, certifying certain facts relating to the
Issuer and its affairs; and
(c) any other certificates, comfort letters or opinions in connection
with any matter related to the Prospectus which are reasonably
requested by the Agent or its solicitor.
12B.4 On the Qualification Date, the Issuer will deliver the following
documents to the Agent and its solicitor, each of which will be in a form and
substance satisfactory to the Agent and its solicitor:
(a) an opinion of counsel of the Issuer, dated as of the
Qualification Date and addressed to the Agent and its solicitor,
relating to any legal matters in connection with the Issuer and
the distribution under the Prospectus for which the Agent or its
solicitor may reasonably request an opinion; and
(b) any other certificates, comfort letters or opinions in connection
with any matter related to the Prospectus which are reasonably
requested by the Agent or its solicitor.
12B.5 The Issuer will furnish to the Agent such number of commercial
copies of the Prospectus and each amendment and supplement thereto and such
other relevant documents as the Agent may reasonably request.
12B.6 When the Securities Commissions of the Selling Jurisdictions in
Canada have each issued a receipt for the final Prospectus, and the Issuer has
delivered to the Agent copies of such receipt and all documents required to be
delivered to the Agent on the date of the final Prospectus and the Qualification
Date, the Agent will deliver, or cause to be delivered, one copy of the
Prospectus to each Special Warrant holder.
12C. REGISTRATION STATEMENT
12C.1 The Issuer will use its commercially reasonable efforts to effect
the registration and sale of the Registrable Securities in accordance with such
reasonable methods of disposition as may be specified in writing by the
shareholders participating therein. Without limiting the foregoing, the Issuer
in each such case will, as expeditiously as is commercially reasonable:
(a) prepare and file with the SEC the Registration Statement to
effect such registration (including such audited financial
statements as may be required by the U.S. Securities Act or the
rules and regulations promulgated thereunder) and use its
commercially reasonable efforts to cause such registration
statement to become effective, and cause the Registration
Statement and the related prospectus and any amendment or
supplement thereto, as of the effective date of the Registration
Statement, or such amendment or supplement (A) to comply in all
material respects with the applicable requirements of the U.S.
Securities Act and the rules and regulations of the SEC
promulgated under the U.S. Securities Act and (B) not to contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein in the light of all the facts and
circumstances not misleading;
(b) promptly prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used
in connection with the Registration Statement as may be necessary
to keep the Registration Statement effective and to comply with
the provisions of the U.S. Securities Act with respect to the
disposition of all Registrable Securities covered by the
Registration Statement until the earlier of such time as all such
Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the selling shareholder or
shareholders thereof set forth in the Registration Statement or a
date calculated as described in Subsection 12A.3;
(c) furnish to each selling shareholder one conformed copy of the
Registration Statement and of each such amendment and supplement
thereto (in each case including all exhibits) and one copy of
each document incorporated by reference therein and such number
of copies of the prospectus included in the Registration
Statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424
promulgated under the U.S. Securities Act relating to such
seller's Registrable Securities, and such other documents as such
seller may reasonably request to facilitate the disposition of
its Registrable Securities;
(d) use its commercially reasonable efforts to register or qualify
all Registrable Securities and other securities covered by the
Registration Statement under such securities or Blue Sky laws of
the states of the United States as each selling shareholder shall
reasonably request, to keep such registration or qualification in
effect for so long as the Registration Statement remains in
effect (subject to the limitations in this Section) except that
the Issuer shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any
jurisdiction in which it is not and would not, but for the
requirements of this Section, be obligated to be so qualified, or
to subject itself to taxation in any such jurisdiction, or to
consent to general service of process in any such jurisdiction;
(e) immediately notify the selling shareholder, at any time when a
prospectus or prospectus supplement relating thereto is required
to be delivered under the U.S. Securities Act, upon discovery
that, or upon the happening of any event as a result of which,
the prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing, which untrue statement
or omission requires amendment of the Registration Statement or
supplementation of the prospectus, and promptly thereafter
prepare and furnish to such selling shareholder a reasonable
number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Securities such prospectus
shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the facts and circumstances then existing;
(f) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC;
(g) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by the Registration
Statement from and after a date not later than the effective date
of the Registration Statement and cause all such Registrable
Securities to be listed on such national securities exchange or
automated system on which the class of Registrable Securities is
then listed; and
(h) pay all Registration Expenses in connection with the registration
of the Registrable Securities.
12C.2 In connection with any registration or qualification of the
Registrable Securities under this Agreement (i) the Issuer shall indemnify and
hold harmless the shareholder, including but not limited to each person or
entity, if any, who controls the shareholder within the meaning of section 15 of
the U.S. Securities Act, against all losses, claims, damages, liabilities and
expenses (including but not limited to reasonable expenses incurred in
investigating, preparing and defending against any claim) to which the
shareholder or such controlling person may become subject under the U.S.
Securities Act, the Exchange Act or otherwise, insofar as the same arise out of
or are based upon or are caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
prospectus (as amended or supplemented if the Issuer shall have furnished any
amendments or supplements thereto) furnished pursuant to this Agreement or
insofar as the same arise out of, are based upon or are caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are ultimately
determined to have arisen out of or were based upon or were caused by any untrue
statement or alleged untrue statement or omission or alleged omission based upon
written information furnished to the Issuer by or on behalf of a shareholder or
any such control person for inclusion in any Registration Statement or
prospectus (and any amendments or supplements thereto); provided, however, that
the Issuer shall not be liable in any such case to the extent that any such
losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the final prospectus, if such
untrue statement or alleged untrue statement or omission or alleged omission is
corrected in an amendment or supplement to the final prospectus and such
shareholder thereafter fails to deliver such final prospectus as so amended or
supplemented prior to or concurrently with the sale of the Registrable
Securities covered by the Registration Statement to the person asserting such
losses after the Issuer had furnished such shareholder with a sufficient number
of copies thereof in a manner and at a time sufficient to permit delivery of the
same by such shareholder, and (ii) each selling shareholder shall indemnify the
Issuer, its affiliates, any person who signed the Registration Statement, and
their respective officers, directors and control persons against all such
losses, claims, damages, liabilities and expenses
(including but not limited to reasonable expenses incurred in investigating,
preparing and defending against any claim) insofar as the same arise out of or
are based upon or are caused by any such untrue statement or alleged untrue
statement or any such omission or alleged omission based on written information
furnished to the Issuer by or on behalf of such shareholder or any such control
person for the inclusion in any Registration Statement or prospectus (and any
amendments or supplements thereto).
12C.3 Promptly upon receipt by a party indemnified under this Agreement
of notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Agreement, such indemnified party shall notify the
indemnifying party in writing of the commencement of such action, but the
failure to so notify the indemnifying party shall not relieve it of any
liability which it may have to any indemnified party otherwise than under this
Agreement unless such failure shall materially and adversely affect the defence
of such action. In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defence of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such indemnified party. The indemnified party shall have the right to employ
separate legal counsel in any such action and participate in the defence
thereof, but the fees and expenses of such counsel (other than reasonable
expenses incurred in investigating, preparing and defending against any claim)
shall be paid by the indemnified party unless (a) the indemnifying party agrees
to pay the same, (b) the indemnifying party fails to assume the defence of such
action with counsel reasonably satisfactory to the indemnified party (in such
case the indemnifying party shall not have the right to assume the defence of
such action on behalf of such indemnified party), or (c) the named parties to
any such action (including any impleaded parties) have been advised by such
counsel that representation of such indemnified party and the indemnifying party
by the same counsel would be inappropriate under applicable standards of
professional conduct (in which case the indemnifying party shall not have the
right to assume the defence of such action on behalf of such indemnified party).
In the event that either of the circumstances described in clauses (b) and (c)
of the sentence immediately preceding shall occur, the indemnified party shall
have the right to select a separate counsel and to assume such legal defence and
otherwise to participate in the defence of any such action, with the expenses
and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred. No
indemnifying party shall be liable for any settlement entered into with its
consent, which consent shall not be unreasonably withheld or delayed.
12C.4 If at any time the Issuer is required to file reports in
compliance with either section 13 or section 15(d) of the Exchange Act, the
Issuer will (a) file reports in compliance with the Exchange Act and (b) comply
with all rules and regulations of the SEC applicable to the use of Rule 144.
13. TERMINATION
13.1 The Agent may terminate its obligations under this Agreement by
notice in writing to the Issuer at any time before the Closing if:
(a) an adverse Material Change, or an adverse change in a Material
Fact relating to any of the Securities, occurs or is announced by
the Issuer;
(b) there is an event or accident, or enactment of a governmental law
or regulation, or other occurrence of any nature which, in the
opinion of the Agent, seriously affects or will seriously affect
the financial markets, or the business of the Issuer or its
Subsidiary or the ability of the Agent to perform its obligations
under this Agreement, or a Purchaser's decision to purchase the
Special Warrants;
(c) following a consideration of the history, business, products,
property or affairs of the Issuer or its principals and
promoters, or of the state of the financial markets in general,
or the state of the market for the Issuer's securities in
particular, the Agent determines, in its sole discretion, that it
is not in the interest of the Purchasers to complete the purchase
and sale of the Special Warrants;
(d) the Securities cannot, in the opinion of the Agent, be marketed
due to the state of the financial markets, or the market for the
Special Warrants in particular;
(e) an enquiry or investigation (whether formal or informal) in
relation to the Issuer, or the Issuer's directors, officers or
promoters, is commenced or threatened by an officer or official
of any competent authority;
(f) any order to cease, halt or suspend trading (including an order
prohibiting communications with persons in order to obtain
expressions of interest) in the securities of the Issuer
prohibiting or restricting the Private Placement is made by a
competent regulatory authority and that order is still in effect;
(g) the Issuer is in breach of any material term of this Agreement;
or
(h) the Agent determines that any of the representations or
warranties made by the Issuer in this Agreement was false at the
date of this Agreement or has become false without the Issuer
providing updated information satisfactory to the Agent acting in
its sole discretion.
13.2 The Agent's obligations hereunder will terminate if the Closing
does not take place within 90 days of the reference date of this Agreement,
unless otherwise agreed in writing by the Agent and the Issuer.
14. WARRANTIES, REPRESENTATIONS AND COVENANTS
14.1 The Issuer warrants and represents to and covenants with the
Agent that:
(a) the Issuer is a valid and subsisting company duly incorporated
and in good standing under the laws of Delaware, and the
Subsidiary is a valid and subsisting corporation duly
incorporated under the laws of its jurisdiction of incorporation;
(b) the Issuer and its Subsidiary each hold all material licences and
permits that are required for carrying on their respective
businesses in the manner and in the jurisdictions in which such
businesses are presently being carried on;
(c) the Issuer and its Subsidiary each have the corporate power and
capacity to own their assets and to carry on the business
presently carried on by them;
(d) the Issuer owns no equity interest in any body corporate or other
legal entity whatsoever except a 100% interest in the Subsidiary;
(e) the authorized and issued capital of the Issuer consists of the
number of common shares disclosed in the Public Record subject
only to the issuance of up to 7,400,000 additional shares on the
exercise of options pursuant to the stock option plan of the
Issuer disclosed in the Public Record and up to 1,100,000
additional shares on the exercise of currently outstanding
warrants disclosed in the Public Record and the potential
issuance of shares pursuant to a consulting contract with Xxxxxx
Delafield Xxxxxxx, LLC, dated June 14, 2001 (the "BDF Contract"),
and all of the shares shown in the Public Record as issued are
issued and outstanding as fully paid and non-assessable as at the
date hereof;
(f) the Issuer will reserve or set aside sufficient shares in its
treasury to issue the Shares and the Warrant Shares, the Agent's
Shares and the Agent's Warrant Shares and they will, when issued,
be duly and validly issued as fully paid and non-assessable;
(g) the Issuer will use its commercially reasonable efforts to file
all documents and take all action necessary to have the Shares
and the Warrant Shares, the Agent's Shares and the Agent's
Warrant Shares listed for trading on the Exchanges upon
conversion of the Special Warrants and Agent's Series "A" Special
Warrants, or exercise of the Warrants or Agent's Warrants, as the
case may be, or as soon thereafter as is commercially reasonable;
(h) the minute books of the Issuer contain all records of the
proceedings of the meetings of the Issuer's directors,
shareholders and committees of directors since incorporation;
(i) the minute book of its Subsidiary contains all records of the
proceedings of the meetings of its Subsidiary's directors,
shareholders and committees of directors since its date of
incorporation;
(j) the Issuer is the beneficial owner of the material businesses and
assets or the interests in the businesses and assets referred to
in the Public Record as being owned by the Issuer or its
Subsidiary, and all agreements by which the Issuer or a
Subsidiary holds or may earn an interest in such businesses or
assets are in good standing according to their terms;
(k) the Public Record, taken as a whole, is true and complete in all
material respects and each document included in the Public Record
was prepared in accordance with the securities legislation
applicable thereto and was true and correct and contained no
Misrepresentation as at the date thereof;
(l) the Issuer is a "reporting issuer" under the securities
legislation of each of the provinces of British Columbia and
Ontario and is a "reporting company" under the Exchange Act and
is not in material default of any of the requirements thereof or
the regulation and rules made thereunder;
(m) the Issuer has filed no material change reports on a confidential
basis with the Commissions which remain confidential;
(n) the Issuer's outstanding common shares are listed, posted and
called for trading on the Exchanges, and the Issuer is not in
material breach of its listing agreement with the Exchanges;
(o) the audited financial statements of the Issuer for its fiscal
year ended March 31, 2001 (the "Audited Financial Statements)
have been prepared in accordance with Canadian generally accepted
accounting principles (with a reconciliation to United States
generally accepted accounting principles), and accurately reflect
the financial position and all material liabilities (accrued,
absolute, contingent or otherwise) of the Issuer on a
consolidated basis as at the date thereof;
(p) the unaudited financial statements of the Issuer for the three
month period ended June 30, 2001 and the six month period ended
September 30, 2001 (the "Interim Financial Statements") have been
prepared in accordance with United States generally accepted
accounting principles, and accurately reflect the financial
position and all material liabilities (accrued, absolute,
contingent or otherwise) of the Issuer on a consolidated basis as
at the date thereof
(q) there have been no adverse Material Changes in the financial
position of the Issuer since the date of the Audited Financial
Statements, except as recorded in the books of the Issuer and
fully and plainly disclosed in the Public Record;
(r) since the date of the Audited Financial Statements, there has
been no damage, loss or other change of any kind whatsoever in
circumstances materially affecting the business or assets of the
Issuer or its Subsidiary, or the right or capacity of the Issuer
or its Subsidiary to carry on its business;
(s) no financial statements of the Issuer are available as at any
date or for any period subsequent to the Interim Financial
Statements;
(t) all of the material transactions of the Issuer and its Subsidiary
have been promptly and properly recorded or filed in or with the
books or records of the Issuer or its Subsidiary;
(u) all of the material contracts of the Issuer and its Subsidiary
are described in the Public Record and are in good standing in
all material respects, and neither the Issuer nor its Subsidiary
is in default in any material respect thereof, and the Issuer is
not aware of any default in any material respect by any other
party to such contracts;
(v) the Issuer has complied and will comply fully with the
requirements of all applicable corporate and securities laws,
including, without limitation, the Applicable Legislation, and
all applicable Delaware corporate legislation in relation to the
issue of the Securities, and in all matters relating to the
Private Placement;
(w) the issue and sale of the Securities by the Issuer does not and
will not conflict with, and does not and will not result in a
breach of, any of the terms of its incorporating documents or any
agreement or instrument to which the Issuer is a party;
(x) neither the Issuer nor its Subsidiary is party to any actions,
suits, proceedings or arbitrations which could materially affect
the business or financial condition of the Issuer, taken as a
whole, and, to the best of the knowledge of the Issuer, no such
actions, suits, proceedings or arbitrations are contemplated or
have been threatened;
(y) there are no judgments against the Issuer or its Subsidiary which
are unsatisfied, nor are there any consent decrees or injunctions
to which the Issuer or its Subsidiary is subject;
(z) to the best of the Issuer's knowledge, neither the Issuer nor its
Subsidiary is in breach of any law, ordinance, statute,
regulation, bylaw, order or decree of any kind whatsoever which
breach would have a material adverse effect on the financial
position, business or prospects of the Issuer on a consolidated
basis;
(aa) this Agreement has been duly authorized by all necessary
corporate action on the part of the Issuer and the Issuer has
full corporate power and authority to undertake the Private
Placement;
(bb) there is not presently, and will not be until the Closing and the
Qualification Date, any Material Change relating to the Issuer
which has not been or will not be fully disclosed in the Public
Record, in accordance with Applicable Legislation;
(cc) no order ceasing, halting or suspending trading in securities of
the Issuer or prohibiting the sale of such securities has been
issued to and is outstanding against the Issuer or, to the best
of the knowledge of the Issuer, its directors, officers or
promoters and, to the best of the knowledge of the Issuer, no
investigations or proceedings for such purposes are pending or
threatened;
(dd) except as disclosed in the Public Record and otherwise than
pursuant to the Issuer's stock option plan and the BDF Contract,
no person has any right, agreement or option, present or future,
contingent or absolute, or any right capable of becoming such a
right, agreement or option, for the issue or allotment of any
shares in the capital of the Issuer or any other security
convertible into or exchangeable for any such shares, or to
require the Issuer to purchase, redeem or otherwise acquire any
of the issued and outstanding shares in its capital;
(ee) the Issuer and its Subsidiary has filed all federal, provincial,
local and foreign tax returns which are required to be filed, or
has requested extensions thereof, and has paid all taxes required
to be paid and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and
payable, except for such assessments, fines and penalties which
are currently being contested in good faith;
(ff) the Issuer and its Subsidiary has established on its books and
records reserves which are adequate for the payment of all taxes
not yet due and payable and there are no liens for taxes on the
assets of the Issuer or its Subsidiary except for taxes not yet
due, and there are no audits of any of the tax returns of the
Issuer or its Subsidiary which are known by the Issuer's
management to be pending, and there are no claims which have been
or may be asserted relating to any such tax returns which, if
determined adversely, would result in the assertion by any
governmental agency of any deficiency which would have a material
adverse effect on the properties, business or assets of the
Issuer on a consolidated basis;
(gg) this Agreement will be upon execution and delivery by the Issuer,
a legal, valid and binding agreement of the Issuer, enforceable
against the Issuer in accordance with its terms, subject only to
customary qualifications regarding creditors' rights and the
availability of equitable remedies;
(hh) the Issuer or its Subsidiary own or are entitled to use all
material patents, trademarks, service marks, trade names,
copyrights, trade secrets, information, proprietary rights and
processes necessary for the
business of the Issuer and its Subsidiary as now conducted and as
proposed to be conducted and, to the best of the knowledge of the
Issuer and its Subsidiary, without any conflict with or
infringement of the rights of others;
(ii) neither the Issuer nor its Subsidiary has received any
communication alleging that the Issuer or any Subsidiary has
violated or, by conducting its business as proposed would violate
any of the patents, trademarks, service marks, trade names,
copyrights, or trade secrets or other proprietary rights of any
other person or entity;
(jj) to the best of the Issuer's knowledge, neither the execution or
delivery of this Agreement, the carrying on of the businesses of
the Issuer and its Subsidiary, nor the conduct of the businesses
of the Issuer or its Subsidiary by their respective employees
will conflict with or result in a breach or default of any of the
material terms of any contract, covenant or instrument under
which any of such employees are bound; and
(kk) apart from the Agent, no person, firm or corporation acting or
purporting to act at the request of the Issuer is entitled to any
brokerage, agency or finder's fee in connection with the
transactions described herein.
14.2 The representations and warranties of the Issuer contained herein
will be true and correct at the Closing and, except where the Issuer has
provided updated information satisfactory to the Agent acting in its sole
discretion, as of the Qualification Date, and, if that is not the case, then the
Agent will be entitled for a period of one year following the Closing to seek
remedy against the Issuer for any such misrepresentation or breach of warranty,
and no investigation by or on behalf of the Agent or the Purchasers will
diminish in any respect their rights to rely on such representations and
warranties.
14.3 The Agent warrants and represents to and covenants with the
Issuer that:
(a) it is a valid and subsisting corporation under the law of the
jurisdiction in which it was incorporated;
(b) it will sell the Special Warrants in compliance with the
Applicable Legislation;
(c) it will execute and deliver a Subscription Agreement, in one of
the forms attached as Schedule "A", for any Special Warrants that
it is required to purchase under this Agreement; and
(d) if it or any of its subsidiaries transfers any Special Warrants,
Agent's Series "A" Special Warrants, Agent's Series "B" Special
Warrants or Agent's Warrants it has purchased or received from
the Issuer, or any Shares, Agent's Shares or Agent's Warrant
Shares issuable upon exercise of the Special Warrants or the
Agent's Warrants to third parties, it will obtain any further
acknowledgements, representations, warranties, or certifications
from the Purchasers as required by the Applicable Legislation,
and will fulfil any filing or reporting obligations in respect of
the transfers in accordance with the Applicable Legislation and
Exchange Policies.
14.4 In connection with all sales of the Securities, the Agent
warrants and represents to and covenants with the Issuer that:
(a) it acknowledges that the Securities have not been registered
under the U.S. Securities Act and may be transferred or sold only
in accordance with the Exemptions;
(b) it has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Securities,
except with its affiliates, any selling group members or with the
prior written consent of the Issuer;
(c) all offers and sales of the Securities in the United States will
be effected by Canaccord Capital Corporation (USA), Inc. (the
"Placement Agent") in accordance with all applicable U.S.
broker-dealer requirements;
(d) all sales to residents of Alberta, Ontario or British Columbia,
as applicable, will be effected by the Agent in accordance with
all applicable Alberta, Ontario and British Columbia registration
requirements and will be made in strict compliance with, in the
case of residents of Alberta, sections 65(1)(e) and 107(1)(d) of
the Securities Act (Alberta), in the case of residents of British
Columbia, sections 45(1)(5) and 74(2)(4) of the Securities Act
(B.C.) and, in the case of residents of Ontario, sections
35(1)(5) and 72(1)(d) of the Securities Act (Ontario);
(e) other than the written documents prepared and agreed upon by the
parties hereto in connection with this Private Placement
transaction, no written material will be used or distributed in
connection with the offer or sale of the Securities in the United
States;
(f) all transfers or sales of the Securities in the United States
will be made only to parties who, prior to such transfer or sale,
represent and warrant in writing that they are an Institutional
"Accredited Investor" as such term is defined in Rule 501 under
the U.S. Securities Act;
(g) no form of General Solicitation or General Advertising will be
used, including advertisements, articles, notices or other
communications published in any newspaper, magazine or similar
media or broadcast over radio or television, or other form of
telecommunications, including electronic display, or any seminar
or meeting whose attendees had been invited by general
solicitation or general advertising, in connection with the offer
or sale of the Securities;
(h) prior to any sale of Securities, it shall cause each purchaser
thereof to give to the Issuer those representations, warranties
and agreements as are contained in the Certification for
Securities Law Compliance attached hereto as part of Schedule
"A".
15. EXPENSES OF AGENT
15.1 The Issuer will pay all of the expenses of the Private Placement
and all the expenses reasonably incurred by the Agent or Canaccord Europe in
connection with the Private Placement, the Prospectus and the Registration
Statement including, without limitation, the fees and expenses of the solicitors
for the Agent and Canaccord Europe (who need not be the same person or firm) for
which an invoice for such fees and receipts for such expenses have been provided
to the Issuer.
15.2 The Issuer will pay the expenses referred to in the previous
Subsection even if the transactions contemplated by this Agreement are not
completed or this Agreement is terminated, unless the failure of acceptance or
completion or the termination is the result of a breach of this Agreement by the
Agent.
15.3 The Agent may, from time to time, render accounts for their
respective expenses in connection with the Private Placement, the Prospectus and
the Registration Statement to the Issuer for payment on or before the dates set
out in the accounts.
15.4 The Issuer authorizes the Agent to deduct its expenses in
connection with the Private Placement from the gross proceeds of the Private
Placement and any advance payments made by the Issuer, including expenses for
which an account has not yet been rendered but for which a reasonable estimate
has been provided by the Agent to the Issuer.
16. GARNISHING ORDERS
16.1 If at any time, up to and including the Closing, the Agent
receives a garnishing order or other form of attachment purporting to attach or
garnish a part or all of the sale price of the Special Warrants, the Agent will
be free to pay the amount purportedly attached or garnished into court.
16.2 Any payment by the Agent into court pursuant to a garnishing
order will be deemed to have been received by the Issuer as payment by the Agent
against the sale price of the Securities to the extent of the amount paid, and
the Issuer will be bound to issue and deliver the Securities proportionately to
the amount paid by the Agent.
16.3 The Agent will not be bound to ascertain the validity of any
garnishing order or attachment, or whether in fact it attaches any moneys held
by the Agent, and the Agent will be free to act with impunity in replying to any
garnishing order or attachment.
16.4 The Issuer will release, indemnify and save harmless the Agent in
respect of all damages, costs, expenses or liability arising from any acts of
the Agent under this Section.
17. INDEMNITY
17.1 The Issuer will indemnify the Agent and Canaccord Europe and
their agents, directors, officers, employees, affiliates (as that term is
defined in the U.S. Securities Act) and shareholders (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties") and save them
harmless against all losses, claims, damages or liabilities:
(a) existing by reason of an untrue statement contained in the Public
Record, one of the subscription agreements attached as Schedule
"A" or in another form approved by the Issuer or other written or
oral representation made by the Issuer to a Purchaser or
potential Purchaser in connection with the Private Placement, the
Prospectus and the Registration Statement, or by reason of the
omission to state any fact necessary to make such statements or
representations not misleading (except for information and
statements supplied by and relating solely to the Agent or
Canaccord Europe);
(b) arising directly or indirectly out of any order made by any
regulatory authority based upon an allegation that any such
untrue statement or representation, or omission exists (except
information and statements supplied by and relating solely to the
Agent or Canaccord Europe), that trading in or distribution of
any of the Securities is to cease;
(c) resulting from the failure by the Issuer to obtain the requisite
regulatory approval for the Private Placement, the Prospectus and
the Registration Statement unless the failure to obtain such
approval is the result of a breach of this Agreement by the
Agent;
(d) resulting from the breach by the Issuer of any of the terms of
this Agreement;
(e) resulting from any representation or warranty made by the Issuer
herein being untrue or ceasing to be true;
(f) subject to Subsection 8.2, if the Issuer fails to issue and
deliver the certificates representing the Special Warrants in the
form and denominations satisfactory to the Agent at the time and
place required by the Agent with the result that any completion
of a sale of the Special Warrants does not take place; or
(g) if, following the completion of a sale of any of the Special
Warrants, a determination is made by any competent authority
setting aside the sale or issuance, unless that determination
arises out of an act or omission or a breach of this Agreement by
the Agent.
17.2 If any action or claim is brought against an Indemnified Party in
respect of which indemnity may be sought from the Issuer pursuant to this
Agreement, the Indemnified Party will promptly notify the Issuer in writing of
the nature of such action or claim.
17.3 The Issuer will assume the defence of the action or claim,
including the employment of counsel and the payment of all expenses.
17.4 The Indemnified Party will have the right to employ separate
counsel, and the Issuer will pay the reasonable fees and expenses of such
counsel.
17.5 The indemnity provided for in this Section will not be limited or
otherwise affected by any other indemnity obtained by the Indemnified Party from
any other person in respect of any matters specified in this
Agreement and will continue in full force and effect until all possible
liability of the Indemnified Parties arising out of the transactions
contemplated by this Agreement has been extinguished by the operation of law.
17.6 If indemnification under this Agreement is found in a final
judgment (not subject to further appeal) by a court of competent jurisdiction
not to be available for reason of public policy, the Issuer and the Indemnified
Parties will contribute to the losses, claims, damages, liabilities or expenses
(or actions in respect thereof) for which such indemnification is held
unavailable in such proportion as is appropriate to reflect the relative
benefits to and fault of the Issuer, on the one hand, and the Indemnified
Parties on the other hand, in connection with the matter giving rise to such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof). No person found liable for a fraudulent Misrepresentation will be
entitled to contribution from any person who is not found liable for such
fraudulent Misrepresentation.
17.7 To the extent that any Indemnified Party is not a party to this
Agreement, the Agent will obtain and hold the right and benefit of this Section
in trust for and on behalf of such Indemnified Party.
17.8 The indemnity provided herein replaces and supersedes the
indemnity provided by the Issuer pursuant to the letter from Canaccord Europe to
the Issuer dated July 25, 2001, and captioned "Proposed Financing".
17.9 The Agent will indemnify the Issuer and save it harmless against
all losses, claims, damages or liabilities arising from the breach by the Agent
of any of the terms of this Agreement.
18. ASSIGNMENT AND SELLING GROUP PARTICIPATION
18.1 The Agent will not assign this Agreement or any of its rights
under this Agreement or, with respect to the Securities, enter into any
agreement in the nature of an option or a sub-option unless and until, for each
intended transaction, the Agent has obtained the consent of the Issuer, and any
required notice has been given to and accepted by the Regulatory Authorities.
18.2 The Agent may offer selling group participation in the normal
course of the brokerage business to selling groups of other dealers, brokers and
investment dealers, who may or who may not be offered part of the Agent's Fee.
The Agent will ensure that there is a restriction in any subagency or selling
group agreements requiring subagents or selling group members not to offer
securities to residents of Alberta, Ontario or British Columbia, as applicable,
except in strict compliance with, in the case of residents of Alberta, sections
65(1)(e) and 107(1)(d) of the Securities Act (Alberta), in the case of residents
of British Columbia, sections 45(1)(5) and 74(2)(4) of the Securities Act (B.C.)
and, in the case of residents of Ontario, sections 35(1)(5) and 72(1)(d) of the
Securities Act (Ontario).
19. RIGHT OF FIRST REFUSAL
19.1 The Issuer will grant Canaccord Europe a right of first refusal
to act as co-manager on any issuance of shares from treasury, except for shares
issued pursuant to securities issued under the Private Placement, shares issued
pursuant to incentive stock options, currently outstanding share purchase
warrants or the BDF Contract, for the purposes of a public or private offering
for a period of one year after the Closing, and shall provide Canaccord Europe
with notice in respect of any such offering.
19.2 The right of first refusal must be exercised by Canaccord Europe
within 15 days following the receipt of the notice by notifying the Issuer that
it will act as co-manager on the issuance of shares from treasury for the
purposes of a public or private offering on the terms set out in the notice.
19.3 If Canaccord Europe fails to give notice within the 15 days that
it will act as co-manager upon the terms set out in the notice, the Issuer will
then be free to make other arrangements to obtain financing from another source
or work with another party as co-manager on the same terms or on terms no less
favourable to the Issuer, subject to obtaining the acceptance of the Regulatory
Authorities.
19.4 The right of first refusal will not terminate if, on receipt of
any notice from the Issuer under this Section, Canaccord Europe fails to
exercise the right.
19.5 This right of first refusal supersedes and replaces any prior
right of first refusal agreement, either written or oral, including but not
limited to the right of first refusal granted to the Agent under the Agency
Agreement between the Issuer and the Agent, as applicable, dated January 11,
2001.
20. NOTICE
20.1 Any notice under this Agreement will be given in writing and must
be delivered, sent by facsimile transmission addressed to the party to which
notice is to be given at the address indicated above, or at another address
designated by the party in writing.
20.2 If notice is sent by facsimile transmission or is delivered, it
will be deemed to have been given at the time of transmission or delivery, or if
not a business day, the next business day.
21. ENGAGEMENT LETTER
The parties to this Agreement acknowledge that this Agreement and the documents
referred to herein contain the entire agreement between the parties with respect
to the subject matter contained herein and supersedes and replaces all other
agreements, written or oral, including but not limited to the letter from
Canaccord Europe to the Issuer dated July 25, 2001, and captioned "Proposed
Financing".
22. TIME
Time is of the essence of this Agreement and will be calculated in accordance
with the provisions of the Interpretation Act (British Columbia).
23. LANGUAGE
This Agreement is to be read with all changes in gender or number as required by
the context.
24. ENUREMENT
This Agreement enures to the benefit of and is binding on the parties to this
Agreement and their successors and permitted assigns.
25. HEADINGS
The headings in this Agreement are for convenience of reference only and do not
affect the interpretation of this Agreement.
26. COUNTERPARTS
This Agreement may be executed in two or more counterparts and may be delivered
by facsimile transmission. Each counterpart will be deemed to be an original and
all counterparts will constitute one agreement, effective as of the reference
date given above.
27. LAW
This Agreement is governed by the internal laws of British Columbia (without
reference to its rules governing the choice or conflict of laws), and the
parties hereto irrevocably attorn and submit to the exclusive jurisdiction of
the courts of British Columbia with respect to any dispute related to this
Agreement.
This document was executed and delivered as of the date given above:
Executed by an authorized )
signatory of GENETRONICS BIOMEDICAL )
CORPORATION )
in the presence of: )
)
)
Xxx Xxxxx )
--------------------------------------- )
Name ) GENETRONICS BIOMEDICAL
) CORPORATION
)
1400 - 0000 Xxxx Xxxxxxxx Xxxxxx )
--------------------------------------- )
Address ) By: /s/Xxx Xxxxxxx
) -----------------------------
)
Xxxxxxxxx, XX X0X 0X0 )
--------------------------------------- )
)
)
Legal Assistant )
--------------------------------------- )
Occupation )
)
)
Executed by an authorized )
signatory of CANACCORD CAPITAL )
CORPORATION )
in the presence of: )
)
)
Xxxxxx Xxxx )
--------------------------------------- )
Name ) CANACCORD CAPITAL CORPORATION
) )
c/o Canaccord Capital Corporation )
--------------------------------------- )
Address ) By: /s/ Xxxxxxx X. Xxxxxxxxx
) ----------------------------
)
2200 - 000 Xxxxxxxxx Xxxxxx )
--------------------------------------- )
) By: /s/Xxxxx X. Xxxxxx
) -----------------------------
)
Xxxxxxxxx, XX X0X 0X0 )
--------------------------------------- )
Occupation )
SCHEDULE "A"
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENTS
INSTRUCTIONS TO PURCHASER
1. Complete all the information in the boxes on page 1 and sign where
indicated with an "X".
2. Complete the certification that starts on page 5 and sign where
indicated with an "X" on page 7.
3. Complete the Toronto Stock Exchange private placement questionnaire and
undertaking that starts on page 10 and sign where indicated with an "X"
on page 11.
4. If you an individual, complete and sign the Form 45-903F1 that starts on
page 8.
THIS IS PAGE 1 OF 19 PAGES OF A SUBSCRIPTION AGREEMENT AND RELATED APPENDIXES,
SCHEDULES AND FORMS. COLLECTIVELY, THESE PAGES TOGETHER ARE
REFERRED TO AS THE "SUBSCRIPTION AGREEMENT".
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(BRITISH COLUMBIA $97,000 MINIMUM SUBSCRIPTION)
TO: GENETRONICS BIOMEDICAL CORPORATION (the "Issuer"),
San Diego, California, U.S.A.
Subject and pursuant to the terms set out in the Terms on pages 2 to 4, the
General Provisions on pages 1 to 8 and the other schedules and appendixes
incorporated by reference, the undersigned (the "Purchaser") hereby irrevocably
subscribes for, and on Closing will purchase from the Issuer, the following
securities at the following price:
================================================================================
___________________________________________________________ Special Warrants
USD 0.45 per Special Warrant for a total purchase price of USD _____________
The Purchaser holds the following securities of the Issuer:
____________________________________________________________________________
================================================================================
The Purchaser directs the Issuer to issue, register and deliver the certificates
representing the Purchased Securities as follows:
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
REGISTRATION INSTRUCTIONS: DELIVERY INSTRUCTIONS:
_________________________________________ _________________________________________
Name to appear on certificate Name and account reference, if applicable
_________________________________________ _________________________________________
Account reference, if applicable Contact name
_________________________________________ _________________________________________
Address Address
_________________________________________ _________________________________________
Telephone number
------------------------------------------------------------------------------------------
EXECUTED BY THE PURCHASER THIS _______ DAY OF _____________, 2001.
------------------------------------------------------------------------------------------
WITNESS: EXECUTION BY PURCHASER:
_________________________________________ X __________________________________________
Signature of witness Signature of individual (if Purchaser IS an
individual)
_________________________________________ X __________________________________________
Name of witness Authorized signatory (if Purchaser is NOT an
individual)
_________________________________________ ____________________________________________
Address of witness Name of Purchaser (PLEASE PRINT)
_________________________________________ ____________________________________________
Name of authorized signatory (PLEASE PRINT)
ACCEPTED this ___ day of _________, 2001.
____________________________________________
GENETRONICS BIOMEDICAL CORPORATION Address of Purchaser (residence if an
Per: individual)
_________________________________________
Authorized signatory
------------------------------------------------------------------------------------------
By signing this acceptance, the Issuer agrees to be bound by the Terms on pages
2 to 4, the General Provisions on pages 1 to 8 and the other schedules and
appendixes incorporated by reference.
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 2 OF 19 PAGES
SCHEDULES AND FORMS)
TERMS
THE REFERENCE DATE OF THIS November 1, 2001
AGREEMENT (THE "AGREEMENT DATE")
THE OFFERING
THE ISSUER Genetronics Biomedical Corporation
THE AGENT Canaccord Capital Corporation (which,
together with any sub-agents, is referred to
as the "Agent") has agreed to purchase the
Special Warrants of the Issuer that are not
sold to purchasers upon the terms and
conditions of an agency agreement dated for
reference the Agreement Date (the "Agency
Agreement").
THE "OFFERING" The offering consists of an aggregate of
5,212,494 non-transferable (except by the
Agent to transferees in accordance with the
Applicable Legislation) special warrants (the
"Special Warrants") at USD 0.45 per Special
Warrant for proceeds of USD 2,345,622.30.
Each Special Warrant is exercisable without
additional payment to acquire one common
share (the "Shares") and one half share
purchase warrant (the "Warrants"). Each whole
Warrant may be exercised within 18 months
from the date of issuance to acquire one
common share of the Issuer (the "Warrant
Shares") at a price of USD 0.75 per share.
PROSPECTUS AND CONVERSION RATE The Issuer will use its commercially
INCREASE reasonable efforts to ensure that the Special
Warrants and the underlying Shares and
Warrant Shares will be qualified by a
prospectus in Canada (the "Prospectus") and
the resale of the Shares and Warrant Shares
by the initial purchasers of the Special
Warrants will be the subject of a
registration statement in the U.S. (the
"Registration Statement") (the day on which
final receipt for the Prospectus is received
by the Issuer and on which the Registration
Statement becomes effective or, if different,
the later of such dates, being the
"Qualification Date"). The Issuer will use
its commercially reasonable efforts to have
the Qualification Date occur within 90 days
of the closing (the "Closing") of this
Offering. If the Qualification Date does not
occur within 90 days of Closing and if the
Purchaser has provided to the Issuer all of
the information required of them by the
Issuer to permit the Issuer to file the
Registration Statement, the Purchaser will
receive a refund of 20% of the total purchase
price paid for the Special Warrants.
ADDITIONAL PROVISIONS IN RESPECT Each Special Warrant may be exercised by the
OF THE SPECIAL WARRANTS Purchasers in whole or in part at any time
after each Closing. If, however, the Special
Warrants are exercised prior to the day on
which a final receipt for the Prospectus is
received by the Issuer, the Shares and
Warrant Shares underlying the Special
Warrants and Warrants, respectively, may not
be traded in British Columbia for a period of
six months from Closing and may not be traded
in Ontario for a period of one year from
Closing. If the Special Warrants are
exercised prior to the day on which the
Registration Statement becomes effective, the
Shares and Warrant Shares underlying the
Special Warrants will be subject to
restrictions on trading under the U.S.
Securities Act until at least one year from
Closing.
All unexercised Special Warrants will be
deemed to be exercised on that day which is
the fifth business day after the day on which
final receipt for the Prospectus is received
by the Issuer.
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 3 OF 19 PAGES
SCHEDULES AND FORMS)
PURCHASED SECURITIES The "Purchased Securities" are Special
Warrants convertible into one common share
and one-half share purchase warrant.
TOTAL AMOUNT 5,212,494 Special Warrants.
PRICE USD 0.45 for total proceeds of USD
2,345,622.30.
WARRANTS Subject to the Applicable Legislation and the
rules and policies of the Toronto Stock
Exchange and the American Stock Exchange, the
Warrants will be non-transferable.
The certificates representing the Warrants
will contain, among other things, the
complete provisions concerning the exercise
of the Warrants and provisions for the
appropriate adjustment in the class and
number of the Warrant Shares issued upon
conversion of the Warrants upon the
occurrence of certain events, including any
subdivision, consolidation or
reclassification of the common shares of the
Issuer, the payment of stock dividends and
the merger of the Issuer.
The Warrants will not restrict or prevent the
Issuer from obtaining any other financing, or
from issuing additional securities or rights.
SELLING JURISDICTIONS Xxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
and certain offshore jurisdictions outside of
Canada and the United States.
"CLOSING DATE" November 23, 2001, or at such other date as
agreed by the Issuer and the Agent.
LEGENDS The certificates representing the Securities
will be endorsed with only the following
legends:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A HOLD PERIOD AND
MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL
12:01 A.M. ON [DATE SIX MONTHS AND ONE DAY
FROM CLOSING] OR IN ONTARIO UNTIL 12:01 A.M.
ON [IN THE CASE OF THE SPECIAL WARRANTS AND
WARRANTS, DATE 18 MONTHS AND ONE DAY FROM
CLOSING AND, IN THE CASE OF THE UNDERLYING
SHARES, DATE ONE YEAR AND ONE DAY FROM
CLOSING] EXCEPT AS PERMITTED BY THE TORONTO
STOCK EXCHANGE AND THE APPLICABLE SECURITIES
LEGISLATION IN THOSE JURISDICTIONS.
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 4 OF 19 PAGES
SCHEDULES AND FORMS)
PURCHASING SUCH SECURITIES, AGREES FOR THE
BENEFIT OF THE CORPORATION THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY (A) TO THE CORPORATION, (B)
PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER OR ANOTHER APPLICABLE
EXEMPTION, OR (C) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT. DELIVERY OF THIS
CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA.
THE ISSUER
JURISDICTION OF ORGANIZATION The Issuer is incorporated under the laws of
Delaware.
AUTHORIZED AND OUTSTANDING The authorized capital of the Issuer is
CAPITAL 100,000,000 shares of common stock with a par
value of $0.001 per share and 10,000,000
shares of preferred stock with a par value of
$0.01 per share. As of October 1, 2001, the
issued capital of the Issuer is 33,759,968
shares of common stock.
STOCK EXCHANGE LISTINGS Shares of the Issuer are listed on the
Toronto Stock Exchange (the "TSE") and the
American Stock Exchange ("AMEX")
"SECURITIES LEGISLATION The Securities Act (Ontario), R.S.O. 1990, c.
APPLICABLE TO THE ISSUER" OR S.5, as amended (the "Ontario Act") (pursuant
"APPLICABLE LEGISLATION" to which the Issuer is a "reporting issuer"),
the Securities Act, R.S.B.C. 1996, c. 418, as
amended (the "B.C. Act") (pursuant to which
the Issuer is a "reporting issuer"), and the
U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act") (to the extent that
the U.S. Securities Act is applicable on the
issuance of securities to U.S. Persons or to
non-U.S. Persons under Regulation D, all of
which terms are terms are defined below),
together with the regulations and rules made
and promulgated thereunder and all
administrative policy statements, blanket
orders and rulings, notices, and other
administrative directions issued by the
Commissions (as defined below), along with
the rules and policies of the TSE (the "TSE
Policies") and the rules and policies of the
AMEX (the "AMEX Policies").
"APPLICABLE EXEMPTIONS" The Offering is being made in accordance with
the exemptions from, or the non-applicability
of, the registration and prospectus
requirements (the "Applicable Exemptions") of
the Applicable Legislation as provided in an
Interpretation Note regarding "offshore"
distributions published by the Ontario
Securities Commission, BCI 72-503 of the B.C.
Securities Commission, sections 35(1)(5) and
72(1)(d) of the Ontario Act, sections
45(1)(5) and 74(2)(4) of the B.C. Act and
Regulation D of the U.S. Securities Act.
END OF TERMS
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 5 OF 19 PAGES
SCHEDULES AND FORMS)
CERTIFICATION FOR U.S. SECURITIES LAW COMPLIANCE
(Capitalized terms not specifically defined in this Certification have the
meaning ascribed to them in the Subscription Agreement to which this Schedule is
attached.)
In connection with the execution of the Subscription Agreement to which this
Schedule is attached, the Purchaser represents and warrants to the Issuer that:
(a) It has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in
the Purchased Securities and it is able to bear the economic risk of
loss of its entire investment.
(b) The Issuer has provided to it the opportunity to ask questions and
receive answers concerning the terms and conditions of the Offering and
it has had access to such information concerning the Issuer as it has
considered necessary or appropriate in connection with its investment
decision to acquire the Purchased Securities.
(c) It is acquiring the Purchased Securities for its own account, for
investment purposes only and not with a view to any resale, distribution
or other disposition of the Purchased Securities in violation of the
United States securities laws.
(d) It understands the Purchased Securities have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the "1933
Act") or the securities laws of any state of the United States and that
the sale contemplated hereby is being made in reliance on an exemption
from such registration requirements. It further understands that, while
the Issuer has agreed to use its best efforts to file a registration
statement in respect of the Purchaser's resale of the Shares and the
Warrant Shares (the "Registration Statement"), in compliance with the
U.S. Securities Act with the United States Securities and Exchange
Commission, and to have the Registration Statement declared effective,
there can be no assurance the Issuer will be able to do so. It also
understands that it will be required to furnish certain information
about it and its holdings of the Issuer's shares as part of the
information that will be included in the Registration Statement.
(e) It satisfies one or more of the categories indicated below (please
initial the appropriate lines):
____ Category 1. An organization described in Section 501(c)(3) of
the United States Internal Revenue Code, a
corporation, a Massachusetts or similar business
trust or partnership, not formed for the specific
purpose of acquiring the Purchased Securities, with
total assets in excess of USD 5,000,000;
____ Category 2. A natural person whose individual net worth, or
joint net worth with that person's spouse, at the
date of this Certification exceeds USD 1,000,000;
____ Category 3. A natural person who had an individual income in
excess of USD 200,000 in each of the two most
recent years or joint income with that person's
spouse in excess of USD 300,000 in each of those
years and has a reasonable expectation of reaching
the same income level in the current year;
____ Category 4. A trust that (a) has total assets in excess of USD
5,000,000, (b) was not formed for the specific
purpose of acquiring the Purchased Securities and
(c) is directed in its purchases of securities by a
person who has such knowledge and experience in
financial and business matters that he/she is
capable of evaluating the merits and risks of an
investment in the Purchased Securities;
____ Category 5. An investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48)
of that Act;
____ Category 6. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act
of 1958;
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 6 OF 19 PAGES
SCHEDULES AND FORMS)
____ Category 7. A private business development company as defined
in Section 202(a)(22) of the Investment Advisors
Act of 1940; or
____ Category 8. An entity in which all of the equity owners satisfy
the requirements of one or more of the foregoing
categories.
(f) It has not purchased the Purchased Securities as a result of any form of
general solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or
other form of telecommunications, including electronic display, or any
seminar or meeting whose attendees have been invited by general
solicitation or general advertising.
(g) If it decides to offer, sell or otherwise transfer any of the Purchased
Securities or the underlying Shares, Warrants or Warrant Shares, it will
not offer, sell or otherwise transfer any of such securities directly or
indirectly, unless:
(i) the sale is to the Issuer;
(ii) the sale is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the
U.S. Securities Act and in compliance with applicable local laws
and regulations;
(iii) the sale is made pursuant to the exemption from the registration
requirements under the U.S. Securities Act provided by Rule 144
thereunder and in accordance with any applicable state securities
or "blue sky" laws;
(iv) the Purchased Securities are sold in a transaction that does not
require registration under the U.S. Securities Act or any
applicable state laws and regulations governing the offer and
sale of securities, and it has prior to such sale furnished to
the Issuer an opinion of counsel reasonably satisfactory to the
Issuer to the effect that such transaction does not require
registration; or
(v) the sale is made pursuant to an effective registration statement
filed under the U.S. Securities Act.
(h) The Purchased Securities and the underlying Shares, Warrants and Warrant
Shares are "restricted securities" as that term is defined in the U.S.
Securities Act, and the certificates representing the Purchased
Securities and the Shares, Warrants and Warrant Shares issued upon
conversion of the Purchased Securities, as well as all certificates
issued in exchange for or in substitution of the foregoing, until such
time as is no longer required under the applicable requirements of the
U.S. Securities Act or applicable state securities laws, will bear, on
the face of such certificate, a legend in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER OR ANOTHER APPLICABLE EXEMPTION,
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. DELIVERY
OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
(i) It understands and agrees that there may be material tax consequences to
the Purchaser of an acquisition or disposition of the Securities. The
Issuer gives no opinion and makes no representation with respect to the
tax consequences to the Purchaser under United States, state, local or
foreign tax law of the undersigned's acquisition or disposition of such
Securities.
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 7 OF 19 PAGES
SCHEDULES AND FORMS)
(j) It understands and agrees that the financial statements of the Issuer
have been prepared in accordance with Canadian generally accepted
accounting principles with a reconciliation to United States generally
accepted accounting principles.
(k) It consents to the Issuer making a notation on its records or giving
instructions to any transfer agent of the Issuer in order to implement
the restrictions on transfer set forth and described in this
Certification and the Subscription Agreement.
Dated _______________ 2001.
X ___________________________________________
Signature of individual (if Purchaser IS an
individual)
X ___________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
_____________________________________________
Name of Purchaser (PLEASE PRINT)
_____________________________________________
Name of authorized signatory (PLEASE PRINT)
_____________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 8 OF 19 PAGES
SCHEDULES AND FORMS)
FORM 45-903F1
SECURITIES ACT
TO BE COMPLETED ONLY BY PURCHASERS WHO ARE INDIVIDUALS
This is the form required under section 135 of the Rules and, if applicable, by
an order issued under section 76 of the British Columbia Securities Act.
ACKNOWLEDGEMENT OF INDIVIDUAL PURCHASER
1. I have agreed to purchase from Genetronics Biomedical Corporation (the
"Issuer") __________________ Purchased Securities (the "Securities") of
the Issuer. The Purchased Securities are special warrants (the "Special
Warrants") at USD 0.45 per Special Warrant. Each Special Warrant is
exercisable without additional payment to acquire one common share (the
"Shares") and one half share purchase warrant (the "Warrants"). Each
whole Warrant may be exercised within 18 months from the date of
issuance to the Purchaser to acquire one common share of the Issuer (the
"Warrant Shares") at a price of USD 0.75 per share.
2. I am purchasing the Securities as principal and, on closing of the
agreement of purchase and sale, I will be the beneficial owner of the
Securities.
3. I [circle one] have / have not received an offering memorandum
describing the Issuer and the Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the
Securities, AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities and
it is my responsibility to find out what those restrictions are
and to comply with them before selling the Securities, AND
(e) I will not receive a prospectus that the British Columbia
Securities Act (the "Act") would otherwise require be given to me
because the Issuer has advised me that it is relying on a
prospectus exemption, AND
(f) because I am not purchasing the Securities under a prospectus, I
will not have the civil remedies that would otherwise be
available to me, AND
(g) the Issuer has advised me that it is using an exemption from the
requirement to sell through a dealer registered under the Act,
except purchases referred to in paragraph 5(g), and as a result I
do not have the benefit of any protection that might have been
available to me by having a dealer act on my behalf.
5. I also acknowledge that: [CIRCLE ONE]
(a) I am purchasing Securities that have an aggregate acquisition
cost of CAD 97,000 or more, OR
(b) my net worth, or my net worth jointly with my spouse at the date
of the agreement of purchase and sale of the security, is not
less than CAD 400,000, OR
(c) my annual net income before tax is not less than CAD 75,000, or
my annual net income before tax jointly with my spouse is not
less than CAD 125,000, in each of the two most recent calendar
years, and I reasonably expect to have annual net income before
tax of not less than CAD 75,000 or annual
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 9 OF 19 PAGES
SCHEDULES AND FORMS)
net income before tax jointly with my spouse of not less than CAD
125,000 in the current calendar year, OR
(d) I am registered under the Act, OR
(e) I am a spouse, parent, brother, sister or child of a senior
officer or director of the Issuer, or of an affiliate of the
Issuer, OR
(f) I am a close personal friend of a senior officer or director of
the Issuer, or of an affiliate of the Issuer, OR
(g) I am purchasing securities under section 128(c) (CAD 25,000 -
registrant required) of the Rules, and I have spoken to a person
[NAME OF REGISTERED PERSON: ___________________________ (THE
"REGISTERED PERSON")] who has advised me that the Registered
Person is registered to trade or advise in the Securities and
that the purchase of the Securities is a suitable investment for
me.
6. If I am an individual referred to in paragraph 5(b), 5(c), or 5(d), I
acknowledge that, on the basis of information about the Securities
furnished by the Issuer, I am able to evaluate the risks and merits of
the Securities because: [CIRCLE ONE]
(a) of my financial, business or investment experience, OR
(b) I have received advice from a person [NAME OF ADVISER:
______________________________ (THE "ADVISER")] who has advised
me that the Adviser is:
(i) registered to advise, or exempted from the requirement to
be registered to advise, in respect of the Securities, and
(ii) not an insider of, or in a special relationship with, the
Issuer.
The statements made in this report are true.
DATED _____________, 2001.
________________________________
Signature of Purchaser
________________________________
Name of Purchaser
________________________________
________________________________
Address of Purchaser
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 10 OF 19 PAGES
SCHEDULES AND FORMS)
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser of listed
securities or securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the securities (the "Issuer")
Genetronics Biomedical Corporation
(b) Number and class of securities to be purchased
____________________ Special Warrants; each Special Warrant is exercisable
without additional payment to acquire one common share (the "Shares") and
one half share purchase warrant (the "Warrants"); each whole Warrant may be
exercised within 18 months from the date of issuance to the Purchaser to
acquire one common share of the Issuer (the "Warrant Shares") at a price of
USD 0.75 per share.
(c) Purchase price
USD 0.45 per Special Warrant
2. DETAILS OF PURCHASER
(a) Name of purchaser
_________________________________________________________________
(b) Address
_________________________________________________________________
_________________________________________________________________
(c) Names and addresses of persons having a greater than 10%
beneficial interest in the purchaser
_________________________________________________________________
_________________________________________________________________
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above)
an insider of the Issuer for the purposes of the Ontario
Securities Act (before giving effect to this private placement)?
If so, state the capacity in which the purchaser (or person named
in response to 2(c)) qualifies as an insider
_________________________________________________________________
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 11 OF 19 PAGES
SCHEDULES AND FORMS)
(b) If the answer to (a) is "no", are the purchaser and the Issuer
controlled by the same person or company? If so, give details
_________________________________________________________________
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the
securities of the Issuer (other than debt securities which are not
convertible into equity securities), directly or indirectly, within the
60 days preceding the date hereof
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period that
expires on the earlier of six months from the date of the closing of the
transaction herein and the issuance of a receipt by the Ontario Securities
Commission for a final prospectus qualifying the distribution of the Shares and
the Warrants, without the prior consent of The Toronto Stock Exchange and any
other regulatory body having jurisdiction.
Dated _______________ 2001.
X ___________________________________________
Signature of individual (if Purchaser IS an
individual)
X ___________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
_____________________________________________
Name of Purchaser (PLEASE PRINT)
_____________________________________________
Name of authorized signatory (PLEASE PRINT)
_____________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
GENERAL PROVISIONS
1. DEFINITIONS
1.1 In the Subscription Agreement (including the first (cover) page,
the Terms on pages 2 to 4, the General Provisions on pages 1 to 8 and the other
schedules and appendixes incorporated by reference), the following words have
the following meanings unless otherwise indicated:
(a) "Agent" has the meaning assigned in the Terms;
(b) "Applicable Legislation" means the Securities Legislation
Applicable to the Issuer (as defined on page 4) and all
legislation incorporated in the definition of this term in other
parts of the Subscription Agreement, together with the
regulations and rules made and promulgated under that legislation
and all administrative policy statements, blanket orders and
rulings, notices and other administrative directions issued by
the Commissions;
(c) "Canaccord Europe" means Canaccord Capital (Europe) Limited;
(d) "Closing" means the completion of the sale and purchase of the
Purchased Securities;
(e) "Closing Date" has the meaning assigned in the Terms;
(f) "Commissions" means the B.C. Securities Commission, the Ontario
Securities Commission and the SEC;
(g) "General Provisions" means those portions of the Subscription
Agreement headed "General Provisions" and contained on page 1 to
8;
(h) "Private Placement" means the offering of the Purchased
Securities on the terms and conditions of the Agency Agreement
and this Subscription Agreement;
(i) "Purchased Securities" has the meaning assigned in the Terms;
(j) "Regulation D" means Regulation D promulgated under the U.S.
Securities Act;
(k) "Regulation S" means Regulation S promulgated under the U.S.
Securities Act;
(l) "Regulatory Authorities" means the Commissions and the TSE;
(m) "SEC" means the Securities and Exchange Commission of the United
States;
(n) "Securities" means the Special Warrants, the Shares, the Warrants
and the Warrant Shares;
(o) "Subscription Agreement" means the first (cover) page, the Terms
on pages 2 to 4, the General Provisions on pages 1 to 8 and the
other schedules and appendixes incorporated by reference;
(p) "Terms" means those portions of the Subscription Agreement headed
"Terms" and contained on page 2 to 4; and
(q) "U.S. Securities Act" means the Securities Act of 1933 (United
States of America), as amended.
1.2 A person is "Deemed to be Acting as a Principal" if the person is
(a) duly authorized to enter into this subscription and to execute
all documentation in connection with the purchase on behalf of
each beneficial purchaser; is purchasing the Purchased Securities
as an agent or trustee for accounts that are fully managed by it
and is
(i) a trust company or insurance company authorized to carry
on business in British Columbia under the Financial
Institutions Act (British Columbia);
(ii) an adviser who manages the investment portfolio of clients
through discretionary authority granted by one or more
clients and who is registered as a portfolio manager under
the Securities Act (B.C.) or is exempt from such
registration;
(iii) a trust company or insurer, authorized under the laws of a
province or territory of Canada other than British
Columbia to carry on business in such province or
territory; or
(iv) a portfolio manager registered or exempt from registration
under the laws of a province or territory of Canada other
than British Columbia; or
(b) acting as agent for one or more disclosed principals, each of
which principals is purchasing as a principal for its own
account, not for the benefit of any other person, and not with a
view to the resale or distribution of all or any of the Purchased
Securities.
1.3 In the Subscription Agreement, the following terms have the
meanings defined in Regulation S: "U.S. Person" and "United States".
1.4 In the Subscription Agreement, unless otherwise specified,
currencies are indicated with the ISO 4217 currency code so that United States
dollars are indicated with the prefix "USD".
1.5 In the Subscription Agreement, other words and phrases that are
capitalized have the meaning assigned in the Subscription Agreement.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1 REPRESENTATIONS BY PURCHASER
The Purchaser represents and warrants to the Issuer that, as at the Agreement
Date and at the Closing:
(a) no prospectus has been filed by the Issuer with the Commissions
in connection with the issuance of the Purchased Securities, the
issuance is exempted from the prospectus requirements of the
Applicable Legislation and:
(i) the Purchaser is restricted from using most of the civil
remedies available under the Applicable Legislation;
(ii) the Purchaser may not receive information that would
otherwise be required to be provided to the Purchaser
under the Applicable Legislation; and
(iii) the Issuer is relieved from certain obligations that would
otherwise apply under the Applicable Legislation;
(b) to the best of the Purchaser's knowledge, the Purchased
Securities were not advertised;
(c) no person has made to the Purchaser any written or oral
representations:
(i) that any person will resell or repurchase the Securities;
(ii) that any person will refund the purchase price of the
Purchased Securities;
(iii) as to the future price or value of any of the Securities;
or
(iv) that the Securities will be listed and posted for trading
on a stock exchange or that application has been made to
list and post the Securities for trading on a stock
exchange, other than the TSE and AMEX;
(d) the Purchaser is resident in British Columbia and represents and
warrants as follows:
(i) in the case of any Purchaser who is Deemed to be Acting as
a Principal, the Purchaser acknowledges that the Issuer
may in the future be required by law to disclose on a
confidential basis to securities regulatory authorities
the identity of each beneficial purchaser of Purchased
Securities for whom the Purchaser may be acting.
(ii) the Purchaser is purchasing sufficient Purchased
Securities so that the aggregate acquisition cost of the
Purchased Securities to the Purchaser is not less than CAD
97,000, the Purchaser is not a corporation, partnership,
trust, fund, association, or any other organized group of
persons created solely, or used primarily, to permit the
purchase of the Purchased Securities (or other similar
purchases) by a group of individuals whose individual
share of the aggregate acquisition cost of the Purchased
Securities is less than CAD 97,000, and the Purchaser is
either:
(A) purchasing the Purchased Securities as principal
and no other person, corporation, firm or other
organization will have a beneficial interest in the
Purchased Securities;
(B) if not purchasing the Purchased Securities as
principal, is Deemed to be Acting as a Principal
and the aggregate acquisition cost of the Purchased
Securities purchased for all the accounts managed
by it is not less than CAD 97,000; or
(C) if not purchasing the Purchased Securities as
principal, is Deemed to be Acting as a Principal
and each of the disclosed principals is purchasing
sufficient Purchased Securities so that the
aggregate acquisition cost of the Purchased
Securities to the Purchaser is not less than CAD
97,000, the Purchaser is not a corporation,
partnership, trust, fund, association, or any other
organized group of persons created solely, or used
primarily, to permit the purchase of the Purchased
Securities (or other similar purchases) by a group
of individuals whose individual share of the
aggregate acquisition cost of the Purchased
Securities is less than CAD 97,000;
(e) the Purchaser acknowledges that the Securities will be subject to
restrictions on resale until six months have elapsed from the
date of issue of the Purchased Securities;
(f) the Purchaser is not a person, company or combination of persons
or companies that is a "control person" of the Issuer as defined
in the Applicable Legislation, will not become a "control person"
by virtue of this purchase of any of the Securities, and does not
intend to act in concert with any other person to form a control
group of the Issuer;
(g) the Purchaser acknowledges that:
(i) no securities commission or similar regulatory authority
has reviewed or passed on the merits of the Securities;
(ii) there is no government or other insurance covering the
Securities;
(iii) there are risks associated with the purchase of the
Securities;
(iv) there are restrictions on the Purchaser's ability to
resell the Securities and it is the responsibility of the
Purchaser to find out what those restrictions are and to
comply with them before selling the Securities; and
(v) the Issuer has advised the Purchaser that the Issuer is
relying on an exemption from the requirements to provide
the Purchaser with a prospectus and to sell securities
through a person registered to sell securities under the
Applicable Legislation and, as a consequence of acquiring
securities pursuant to this exemption, certain
protections, rights and remedies provided by the
Applicable Legislation, including statutory rights of
rescission or damages, will not be available to the
Purchaser;
(h) this subscription has not been solicited in any other manner
contrary to the Applicable Legislation;
(i) the Purchaser is at arm's length (as that term is customarily
defined) with the Issuer;
(j) the Purchaser acknowledges that the Securities are subject to
restrictions on trading in British Columbia and Ontario as
described in the section headed "Legends" on page 3;
(k) the Purchaser acknowledges that the Securities have not been
registered under the U.S. Securities Act and may not be offered
or sold unless registered under the U.S. Securities Act and the
securities laws of all applicable states of the United States or
an exemption from such registration requirements is available;
(l) the Purchaser acknowledges that the Issuer will use its
commercially reasonable efforts to obtain a final receipt for a
Prospectus in British Columbia and Ontario and to procure the
effectiveness of a Registration Statement in the U.S. within 90
days of the Closing;
(m) the Purchaser (or others for whom it is contracting hereunder)
has been advised to consult its own legal and tax advisors with
respect to applicable resale restrictions and tax considerations,
and it (or others for whom it is contracting hereunder) is solely
responsible for compliance with applicable resale restrictions
and applicable tax legislation;
(n) the Purchaser has no knowledge of a "material fact" or "material
change" (as those terms are defined in the Applicable
Legislation) in the affairs of the Issuer that has not been
generally disclosed to the public, save knowledge of this
particular transaction;
(o) the offer made by this subscription is irrevocable (subject to
the Purchaser's right to withdraw the subscription and to
terminate the obligations as set out in this Agreement) and
requires acceptance by the Issuer and approval of the TSE;
(p) the Purchaser has the legal capacity and competence to enter into
and execute this Agreement and to take all actions required
pursuant to the Subscription Agreement and, if the Purchaser is a
corporation it is duly incorporated and validly subsisting under
the laws of its jurisdiction of incorporation and all necessary
approvals by its directors, shareholders and others have been
given to authorize execution of this Agreement on behalf of the
Purchaser;
(q) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of
the terms and provisions of any law applicable to, or the
constating documents of, the Purchaser or of any agreement,
written or oral, to which the Purchaser may be a party or by
which the Purchaser is or may be bound;
(r) this Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding agreement of
the Purchaser enforceable against the Purchaser;
(s) the Purchaser has been independently advised as to the applicable
hold period imposed in respect of the Securities by securities
legislation in the jurisdiction in which the Purchaser resides
and confirms that no representation has been made respecting the
applicable hold periods for the Securities and is
aware of the risks and other characteristics of the Securities
and of the fact that the Purchaser may not be able to resell the
Securities except in accordance with the applicable securities
legislation and regulatory policies;
(t) the Purchaser, and any beneficial purchaser for whom the
Purchaser is acting, is resident in the province or jurisdiction
set out on the first (cover) page of this Agreement;
(u) the Purchaser is capable of assessing the proposed investment as
a result of the Purchaser's financial experience or as a result
of advice received from a registered person other than the Issuer
or any affiliates of the Issuer;
(v) if required by applicable securities legislation, policy or order
or by any securities commission, stock exchange or other
regulatory authority, the Purchaser will execute, deliver, file
and otherwise assist the Issuer in filing, such reports,
undertakings and other documents with respect to the issue of the
Securities as may be required;
(w) the Purchaser acknowledges that the Agent or Canaccord Europe
will receive a commission, agent's warrants,a corporate finance
fee and an administration fee from the Issuer in connection with
this Private Placement;
(x) the Purchaser will not conduct hedging transactions involving the
Shares unless in compliance with the Applicable Legislation;
(y) the Purchaser acknowledges that the Issuer will refuse, and has
instructed its transfer agent to refuse, to register any
transfers of the Purchased Securities or the underlying Shares,
Warrants or Warrants Shares unless such transfer is made in
accordance with regulations pursuant to, or registration under,
the Applicable Legislation (including the U.S. Securities Act) or
pursuant to an available exemption from such registration.
2.2 RELIANCE, INDEMNITY AND NOTIFICATION OF CHANGES
The representations and warranties in the Subscription Agreement (including the
first (cover) page, the Terms on pages 2 to 4, the General Provisions on pages
12 to 19 and the other schedules and appendixes incorporated by reference) are
made by the Purchaser with the intent that they be relied upon by the Issuer and
the Agent in determining its suitability as a purchaser of Purchased Securities,
and the Purchaser hereby agrees to indemnify the Issuer and the Agent against
all losses, claims, costs, expenses and damages or liabilities which any of them
may suffer or incur as a result of reliance thereon. The Purchaser undertakes to
notify the Issuer and the Agent immediately of any change in any representation,
warranty or other information relating to the Purchaser set forth in the
Subscription Agreement (including the first (cover) page, the Terms on pages 2
to 4, the General Provisions on pages 12 to 19 and the other schedules and
appendixes incorporated by reference) which takes place prior to the Closing.
2.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER
3.1 INCORPORATION BY REFERENCE FROM AGENCY AGREEMENT
The Issuer hereby makes in favour of the Purchaser the representations and
warranties of the Issuer contained in the Agency Agreement. The Issuer will
provide to the Purchaser, promptly on request and without charge, an extract
from
the Agency Agreement certified by an officer of the Issuer as a true extract of
the representations and warranties contained in the Agency Agreement.
3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
3.3 EXCLUSION OF LIABILITY OF AGENT
The Purchaser acknowledges that the Agent is acting as an agent in this
transaction and that all warranties, conditions, representations or
stipulations, other than those relating solely to the Agent, whether express or
implied and whether arising hereunder or under prior agreement or statement or
by statute or at common law are expressly those of the Issuer. The Purchaser
acknowledges that no information or representation concerning the Issuer has
been provided to the Purchaser by the Issuer, the Agent or Canaccord Europe
other than those contained in the Subscription Agreement and the Agency
Agreement and that the Purchaser is relying entirely upon the Subscription
Agreement and the Agency Agreement. Any information given or statement made is
given or made without liability or responsibility howsoever arising on the part
of the Agent or Canaccord Europe. No person in the employment of, or acting as
agent of, the Agent or Canaccord Europe has any authority to make or give any
representation or warranty whatsoever in relation to the Issuer or the
Securities. Any information given or statement made is given or made without
liability or responsibility howsoever arising on the part of the Agent or
Canaccord Europe, and the Purchaser hereby releases the Agent and Canaccord
Europe from any claims that may arise in respect of any such information given
or statement made.
4. WITHDRAWAL OF SUBSCRIPTION AND CONTRACTUAL RIGHTS
The Purchaser reserves the right to withdraw this subscription and to terminate
its obligations hereunder at any time before Closing if the Agent terminates its
obligations with respect to the Private Placement under the Agency Agreement and
hereby appoints the Agent as its agent for the purpose of notifying the Issuer
of the withdrawal or termination of this subscription.
If the Purchaser, who acquires Shares and Warrants on the deemed exercise of the
Purchased Securities purchased by it, is or becomes entitled under the
Applicable Legislation to the remedy of rescission by reason of the Prospectus
or any amendment thereto containing a misrepresentation, the Purchaser will be
entitled to rescission not only of the Purchaser's exercise of such Purchased
Securities, but also of its subscription hereunder, and will be entitled in
connection with such rescission to a full refund from the Issuer of all
consideration paid to the Issuer on acquisition of such Purchased Securities.
The foregoing is in addition to any other right or remedy available to the
Purchaser under the Applicable Legislation or otherwise at law.
5. CLOSING
5.1 The Purchaser acknowledges that there is a risk that insufficient
funds may be raised on the Closing to fund the Issuer's business objectives.
5.2 On or before the end of the fifth business day before the Closing
Date, the Purchaser will deliver to the Issuer or the Agent the Subscription
Agreement and all applicable schedules and required forms, duly executed, and
payment in full for the total price of the Purchased Securities to be purchased
by the Purchaser.
5.3 At Closing, the Issuer will deliver to the Agent the certificates
representing the Purchased Securities purchased by the Purchaser registered in
the name of the Purchaser or its nominee.
6. INDEMNITY IN CONNECTION WITH REGISTRATION STATEMENT
The Purchaser hereby indemnifies the Issuer, its affiliates, any person who
signed the Registration Statement, and their respective officers, directors and
control persons against all such losses, claims, damages, liabilities and
expenses (including but not limited to reasonable expenses incurred in
investigating, preparing and defending against any claim) insofar as they arise
out of or are based upon or are caused by any untrue statement or alleged untrue
statement or any omission or alleged omission based on written information
furnished to the Issuer by or on behalf of the Purchaser for the inclusion in
any Registration Statement or prospectus (and any amendments or supplements
thereto).
7. MISCELLANEOUS
7.1 The Purchaser was introduced to the Issuer by the Agent or
Canaccord Europe under the terms of the Agency Agreement.
7.2 The Purchaser agrees to sell, assign or transfer the Securities
only in accordance with the requirements of Applicable Legislation and any
legends placed on the Securities as contemplated by the Subscription Agreement.
7.3 The Purchaser hereby irrevocably authorizes the Agent, in its
sole discretion:
(a) to act as the Purchaser's representative at the Closing, to
receive certificates for Purchased Securities subscribed for and
to execute in its name and on its behalf all closing receipts and
documents required; and
(b) to waive, in whole or in part, any representations, warranties,
covenants or conditions for the benefit of the Purchaser
contained in the Subscription Agreement or in any agreement or
document ancillary or related to the Private Placement.
7.4 The Purchaser hereby authorizes the Issuer to correct any minor
errors in, or complete any minor information missing from any part of the
Subscription Agreement and any other schedules, forms, certificates or documents
executed by the Purchaser and delivered to the Issuer in connection with the
Private Placement.
7.5 The Issuer and the Agent will be entitled to rely on delivery by
fax machine of an executed copy of this subscription, and acceptance by the
Issuer of such faxed copy will be equally effective to create a valid and
binding agreement between the Purchaser and the Issuer in accordance with the
terms of the Subscription Agreement.
7.6 Without limitation, this subscription and the transactions
contemplated hereby are conditional upon and subject to the Issuer receiving the
approval of the TSE and the AMEX to this subscription and the transactions
contemplated hereby.
7.7 This agreement is not assignable or transferable by the parties
hereto without the express written consent of the other party to this Agreement.
7.8 Time is of the essence of this Agreement and will be calculated
in accordance with the provisions of the Interpretation Act (British Columbia).
7.9 Except as expressly provided in this Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Agreement contains the entire agreement between the parties with respect to
the Securities and there are no other terms, conditions, representations or
warranties whether expressed, implied, oral or written, by statute, by common
law, by the Issuer, by the Agent, or by anyone else.
7.10 The parties to this Agreement may amend this Agreement only in
writing.
7.11 This Agreement enures to the benefit of and is binding upon the
parties to this Agreement and their successors and permitted assigns.
7.12 A party to this Agreement will give all notices to or other
written communications with the other party to this Agreement concerning this
Agreement by hand or by registered mail addressed to the address given above.
7.13 This Agreement is to be read with all changes in gender or number
as required by the context.
7.14 This Agreement will be governed by and construed in accordance
with the internal laws of British Columbia (without reference to its rules
governing the choice or conflict of laws), and the parties hereto irrevocably
attorn and submit to the exclusive jurisdiction of the courts of British
Columbia with respect to any dispute related to this Agreement.
END OF GENERAL PROVISIONS
END OF SUBSCRIPTION AGREEMENT
INSTRUCTIONS TO PURCHASER
1. Complete all the information in the boxes on page 1 and sign where
indicated with an "X".
2. Complete the certification that starts on page 5 and sign where
indicated with an "X" on page 7.
3. Complete the Toronto Stock Exchange private placement questionnaire and
undertaking that starts on page 10 and sign where indicated with an "X"
on page 11.
THIS IS PAGE 1 OF 16 PAGES OF A SUBSCRIPTION AGREEMENT AND RELATED APPENDIXES,
SCHEDULES AND FORMS. COLLECTIVELY, THESE PAGES TOGETHER ARE
REFERRED TO AS THE"SUBSCRIPTION AGREEMENT".
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(UNITED STATES AND OUTSIDE CANADA)
TO: GENETRONICS BIOMEDICAL CORPORATION (the "Issuer"),
San Diego, California, U.S.A.
Subject and pursuant to the terms set out in the Terms on pages 2 to 4, the
General Provisions on pages 10 to 16 and the other schedules and appendixes
incorporated by reference, the undersigned (the "Purchaser") hereby irrevocably
subscribes for, and on Closing will purchase from the Issuer, the following
securities at the following price:
================================================================================
___________________________________________________________ Special Warrants
USD 0.45 per Special Warrant for a total purchase price of USD _____________
The Purchaser holds the following securities of the Issuer:
____________________________________________________________________________
================================================================================
The Purchaser directs the Issuer to issue, register and deliver the certificates
representing the Purchased Securities as follows:
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
REGISTRATION INSTRUCTIONS: DELIVERY INSTRUCTIONS:
_________________________________________ _________________________________________
Name to appear on certificate Name and account reference, if applicable
_________________________________________ _________________________________________
Account reference, if applicable Contact name
_________________________________________ _________________________________________
Address Address
_________________________________________ _________________________________________
Telephone number
------------------------------------------------------------------------------------------
EXECUTED by the Purchaser this _______ day of _____________, 2001.
------------------------------------------------------------------------------------------
WITNESS: EXECUTION BY PURCHASER:
_________________________________________ X __________________________________________
Signature of witness Signature of individual (if Purchaser IS an
individual)
_________________________________________ X __________________________________________
Name of witness Authorized signatory (if Purchaser is NOT an
individual)
_________________________________________ ____________________________________________
Address of witness Name of Purchaser (PLEASE PRINT)
_________________________________________ ____________________________________________
Name of authorized signatory (PLEASE PRINT)
ACCEPTED this ___ day of _________, 2001.
____________________________________________
GENETRONICS BIOMEDICAL CORPORATION Address of Purchaser (residence if an
Per: individual)
_________________________________________
Authorized signatory
------------------------------------------------------------------------------------------
By signing this acceptance, the Issuer agrees to be bound by the Terms on pages
2 to 4, the General Provisions on pages 1 to 8 and the other schedules and
appendixes incorporated by reference.
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 2 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
TERMS
THE REFERENCE DATE OF THIS November 1, 2001
AGREEMENT (THE "AGREEMENT DATE")
THE OFFERING
THE ISSUER Genetronics Biomedical Corporation
THE AGENT Canaccord Capital Corporation (which,
together with any sub-agents, is referred to
as the "Agent") has agreed to purchase the
Special Warrants of the Issuer that are not
sold to purchasers upon the terms and
conditions of an agency agreement dated for
reference the Agreement Date (the "Agency
Agreement").
THE "OFFERING" The offering consists of an aggregate of
5,212,494 non-transferable (except by the
Agent to transferees in accordance with the
Applicable Legislation) special warrants (the
"Special Warrants") at USD 0.45 per Special
Warrant for proceeds of USD 2,345,622.30.
Each Special Warrant is exercisable without
additional payment to acquire one common
share (the "Shares") and one half share
purchase warrant (the "Warrants"). Each whole
Warrant may be exercised within 18 months
from the date of issuance to acquire one
common share of the Issuer (the "Warrant
Shares") at a price of USD 0.75 per share.
PROSPECTUS AND CONVERSION RATE The Issuer will use its commercially
INCREASE reasonable efforts to ensure that the Special
Warrants and the underlying Shares and
Warrant Shares will be qualified by a
prospectus in Canada (the "Prospectus") and
the resale of the Shares and Warrant Shares
by the initial purchasers of the Special
Warrants will be the subject of a
registration statement in the U.S. (the
"Registration Statement") (the day on which
final receipt for the Prospectus is received
by the Issuer and on which the Registration
Statement becomes effective or, if different,
the later of such dates, being the
"Qualification Date"). The Issuer will use
its commercially reasonable efforts to have
the Qualification Date occur within 90 days
of the Closing (the "Closing") of this
Offering. If the Qualification Date does not
occur within 90 days of Closing and if the
Purchaser has provided to the Issuer all of
the information required of them by the
Issuer to permit the Issuer to file the
Registration Statement, the Purchaser will
receive a refund of 20% of the total purchase
price paid for the Special Warrants.
ADDITIONAL PROVISIONS IN RESPECT Each Special Warrant may be exercised by the
OF THE SPECIAL WARRANTS Purchasers in whole or in part at any time
after each Closing. If, however, the Special
Warrants are exercised prior to the day on
which a final receipt for the Prospectus is
received by the Issuer, the Shares and
Warrant Shares underlying the Special
Warrants and Warrants, respectively, may not
be traded in British Columbia for a period of
six months from Closing and may not be traded
in Ontario for a period of one year from
Closing. If the Special Warrants are
exercised prior to the day on which the
Registration Statement becomes effective, the
Shares and Warrant Shares underlying the
Special Warrants will be subject to
restrictions on trading under the U.S.
Securities Act until at least one year from
Closing.
All unexercised Special Warrants will be
deemed to be exercised on that day which is
the fifth business day after the day on which
final receipt for the Prospectus is received
by the Issuer.
PURCHASED SECURITIES The "Purchased Securities" are Special
Warrants convertible into one
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 3 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
common share and one-half share purchase
warrant.
TOTAL AMOUNT 5,212,494 Special Warrants.
PRICE USD 0.45 for total proceeds of USD
2,345,622.30.
WARRANTS Subject to the Applicable Legislation and the
rules and policies of the Toronto Stock
Exchange and the American Stock Exchange, the
Warrants will be non-transferable.
The certificates representing the Warrants
will contain, among other things, the
complete provisions concerning the exercise
of the Warrants and provisions for the
appropriate adjustment in the class and
number of the Warrant Shares issued upon
conversion of the Warrants upon the
occurrence of certain events, including any
subdivision, consolidation or
reclassification of the common shares of the
Issuer, the payment of stock dividends and
the merger of the Issuer.
The Warrants will not restrict or prevent the
Issuer from obtaining any other financing, or
from issuing additional securities or rights.
SELLING JURISDICTIONS Xxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
and certain offshore jurisdictions outside of
Canada and the United States.
"CLOSING DATE" November 23, 2001, or at such other date as
agreed by the Issuer and the Agent.
LEGENDS The certificates representing the Securities
will be endorsed with only the following
legends:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A HOLD PERIOD AND
MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL
12:01 A.M. ON [DATE SIX MONTHS AND ONE DAY
FROM CLOSING] OR IN ONTARIO UNTIL 12:01 A.M.
ON [IN THE CASE OF THE SPECIAL WARRANTS AND
WARRANTS, DATE 18 MONTHS AND ONE DAY FROM
CLOSING AND, IN THE CASE OF THE UNDERLYING
SHARES, DATE ONE YEAR AND ONE DAY FROM
CLOSING] EXCEPT AS PERMITTED BY THE TORONTO
STOCK EXCHANGE AND THE APPLICABLE SECURITIES
LEGISLATION IN THOSE JURISDICTIONS.
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE CORPORATION
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE
CORPORATION, (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER OR
ANOTHER APPLICABLE EXEMPTION, OR (C) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT.
DELIVERY OF THIS CERTIFICATE MAY NOT
CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
THE ISSUER
JURISDICTION OF ORGANIZATION The Issuer is incorporated under the laws of
Delaware.
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 4 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
AUTHORIZED AND OUTSTANDING The authorized capital of the Issuer is
CAPITAL 100,000,000 shares of common stock with a par
value of $0.001 per share and 10,000,000
shares of preferred stock with a par value of
$0.01 per share. As of October 1, 2001, the
issued capital of the Issuer is 33,759,968
shares of common stock.
STOCK EXCHANGE LISTINGS Shares of the Issuer are listed on the
Toronto Stock Exchange (the "TSE") and the
American Stock Exchange ("AMEX")
"SECURITIES LEGISLATION The Securities Act (Ontario), R.S.O. 1990, c.
APPLICABLE TO THE ISSUER" OR S.5, as amended (the "Ontario Act") (pursuant
"APPLICABLE LEGISLATION" to which the Issuer is a "reporting issuer"),
the Securities Act, R.S.B.C. 1996, c. 418, as
amended (the "B.C. Act") (pursuant to which
the Issuer is a "reporting issuer"), and the
U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act") (to the extent that
the U.S. Securities Act is applicable on the
issuance of securities to U.S. Persons or to
non-U.S. Persons under Regulation D, all of
which terms are terms are defined below),
together with the regulations and rules made
and promulgated thereunder and all
administrative policy statements, blanket
orders and rulings, notices, and other
administrative directions issued by the
Commissions (as defined below), along with
the rules and policies of the TSE (the "TSE
Policies") and the rules and policies of the
AMEX (the "AMEX Policies").
"APPLICABLE EXEMPTIONS" The Offering is being made in accordance with
the exemptions from, or the non-applicability
of, the registration and prospectus
requirements (the "Applicable Exemptions") of
the Applicable Legislation as provided in an
Interpretation Note regarding "offshore"
distributions published by the Ontario
Securities Commission, BCI 72-503 of the B.C.
Securities Commission, sections 35(1)(5) and
72(1)(d) of the Ontario Act, sections
45(1)(5) and 74(2)(4) of the B.C. Act and
Regulation D of the U.S. Securities Act.
END OF TERMS
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 5 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
CERTIFICATION FOR U.S. SECURITIES LAW COMPLIANCE
(Capitalized terms not specifically defined in this Certification have the
meaning ascribed to them in the Subscription Agreement to which this Schedule is
attached.)
In connection with the execution of the Subscription Agreement to which this
Schedule is attached, the Purchaser represents and warrants to the Issuer that:
(a) It has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in
the Purchased Securities and it is able to bear the economic risk of
loss of its entire investment.
(b) The Issuer has provided to it the opportunity to ask questions and
receive answers concerning the terms and conditions of the Offering and
it has had access to such information concerning the Issuer as it has
considered necessary or appropriate in connection with its investment
decision to acquire the Purchased Securities.
(c) It is acquiring the Purchased Securities for its own account, for
investment purposes only and not with a view to any resale, distribution
or other disposition of the Purchased Securities in violation of the
United States securities laws.
(d) It understands the Purchased Securities have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the "1933
Act") or the securities laws of any state of the United States and that
the sale contemplated hereby is being made in reliance on an exemption
from such registration requirements. It further understands that, while
the Issuer has agreed to use its best efforts to file a registration
statement in respect of the Purchaser's resale of the Shares and the
Warrant Shares (the "Registration Statement"), in compliance with the
U.S. Securities Act with the United States Securities and Exchange
Commission, and to have the Registration Statement declared effective,
there can be no assurance the Issuer will be able to do so. It also
understands that it will be required to furnish certain information
about it and its holdings of the Issuer's shares as part of the
information that will be included in the Registration Statement.
(e) It satisfies one or more of the categories indicated below (please
initial the appropriate lines):
____ Category 1. An organization described in Section 501(c)(3) of
the United States Internal Revenue Code, a
corporation, a Massachusetts or similar business
trust or partnership, not formed for the specific
purpose of acquiring the Purchased Securities, with
total assets in excess of USD 5,000,000;
____ Category 2. A natural person whose individual net worth, or
joint net worth with that person's spouse, at the
date of this Certification exceeds USD 1,000,000;
____ Category 3. A natural person who had an individual income in
excess of USD 200,000 in each of the two most
recent years or joint income with that person's
spouse in excess of USD 300,000 in each of those
years and has a reasonable expectation of reaching
the same income level in the current year;
____ Category 4. A trust that (a) has total assets in excess of USD
5,000,000, (b) was not formed for the specific
purpose of acquiring the Purchased Securities and
(c) is directed in its purchases of securities by a
person who has such knowledge and experience in
financial and business matters that he/she is
capable of evaluating the merits and risks of an
investment in the Purchased Securities;
____ Category 5. An investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48)
of that Act;
____ Category 6. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act
of 1958;
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 6 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
____ Category 7. A private business development company as defined
in Section 202(a)(22) of the Investment Advisors
Act of 1940; or
____ Category 8. An entity in which all of the equity owners satisfy
the requirements of one or more of the foregoing
categories.
(f) It has not purchased the Purchased Securities as a result of any form of
general solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or
other form of telecommunications, including electronic display, or any
seminar or meeting whose attendees have been invited by general
solicitation or general advertising.
(g) If it decides to offer, sell or otherwise transfer any of the Purchased
Securities or the underlying Shares, Warrants or Warrant Shares, it will
not offer, sell or otherwise transfer any of such securities directly or
indirectly, unless:
(i) the sale is to the Issuer;
(ii) the sale is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the
U.S. Securities Act and in compliance with applicable local laws
and regulations;
(iii) the sale is made pursuant to the exemption from the registration
requirements under the U.S. Securities Act provided by Rule 144
thereunder and in accordance with any applicable state securities
or "blue sky" laws;
(iv) the Purchased Securities are sold in a transaction that does not
require registration under the U.S. Securities Act or any
applicable state laws and regulations governing the offer and
sale of securities, and it has prior to such sale furnished to
the Issuer an opinion of counsel reasonably satisfactory to the
Issuer to the effect that such transaction does not require
registration; or
(v) the sale is made pursuant to an effective registration statement
filed under the U.S. Securities Act.
(h) The Purchased Securities and the underlying Shares, Warrants and Warrant
Shares are "restricted securities" as that term is defined in the U.S.
Securities Act, and the certificates representing the Purchased
Securities and the Shares, Warrants and Warrant Shares issued upon
conversion of the Purchased Securities, as well as all certificates
issued in exchange for or in substitution of the foregoing, until such
time as is no longer required under the applicable requirements of the
U.S. Securities Act or applicable state securities laws, will bear, on
the face of such certificate, a legend in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER OR ANOTHER APPLICABLE EXEMPTION,
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. DELIVERY
OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
(i) It understands and agrees that there may be material tax consequences to
the Purchaser of an acquisition or disposition of the Securities. The
Issuer gives no opinion and makes no representation with respect to the
tax consequences to the Purchaser under United States, state, local or
foreign tax law of the undersigned's acquisition or disposition of such
Securities.
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 7 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
(j) It understands and agrees that the financial statements of the Issuer
have been prepared in accordance with Canadian generally accepted
accounting principles with a reconciliation to United States generally
accepted accounting principles.
(k) It consents to the Issuer making a notation on its records or giving
instructions to any transfer agent of the Issuer in order to implement
the restrictions on transfer set forth and described in this
Certification and the Subscription Agreement.
Dated _______________ 2001.
X __________________________________________
Signature of individual (if Purchaser IS an
individual)
X __________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
____________________________________________
Name of Purchaser (PLEASE PRINT)
____________________________________________
Name of authorized signatory (PLEASE PRINT)
____________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 8 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser of listed
securities or securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the securities (the "Issuer")
Genetronics Biomedical Corporation
(b) Number and class of securities to be purchased
____________________ Special Warrants; each Special Warrant is exercisable
without additional payment to acquire one common share (the "Shares") and
one half share purchase warrant (the "Warrants"); each whole Warrant may be
exercised within 18 months from the date of issuance to the Purchaser to
acquire one common share of the Issuer (the "Warrant Shares") at a price of
USD 0.75 per share.
(c) Purchase price
USD 0.45 per Special Warrant
2. DETAILS OF PURCHASER
(a) Name of purchaser
_________________________________________________________________
(b) Address
_________________________________________________________________
_________________________________________________________________
(c) Names and addresses of persons having a greater than 10%
beneficial interest in the purchaser
_________________________________________________________________
_________________________________________________________________
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above)
an insider of the Issuer for the purposes of the Ontario
Securities Act (before giving effect to this private placement)?
If so, state the capacity in which the purchaser (or person named
in response to 2(c)) qualifies as an insider
_________________________________________________________________
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 9 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
(b) If the answer to (a) is "no", are the purchaser and the Issuer
controlled by the same person or company? If so, give details
_________________________________________________________________
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the
securities of the Issuer (other than debt securities which are not
convertible into equity securities), directly or indirectly, within the
60 days preceding the date hereof
________________________________________________________________________
________________________________________________________________________
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period that
expires on the earlier of six months from the date of the closing of the
transaction herein and the issuance of a receipt by the Ontario Securities
Commission for a final prospectus qualifying the distribution of the Shares and
the Warrants, without the prior consent of The Toronto Stock Exchange and any
other regulatory body having jurisdiction.
Dated _______________ 2001.
X __________________________________________
Signature of individual (if Purchaser IS an
individual)
X __________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
____________________________________________
Name of Purchaser (PLEASE PRINT)
____________________________________________
Name of authorized signatory (PLEASE PRINT)
____________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
GENERAL PROVISIONS
1. DEFINITIONS
1.1 In the Subscription Agreement (including the first (cover) page,
the Terms on pages 2 to 4, the General Provisions on pages 1 to 8 and the other
schedules and appendixes incorporated by reference), the following words have
the following meanings unless otherwise indicated:
(a) "Agent" has the meaning assigned in the Terms;
(b) "Applicable Legislation" means the Securities Legislation
Applicable to the Issuer (as defined on page 4) and all
legislation incorporated in the definition of this term in other
parts of the Subscription Agreement, together with the
regulations and rules made and promulgated under that legislation
and all administrative policy statements, blanket orders and
rulings, notices and other administrative directions issued by
the Commissions;
(c) "Canaccord Europe" means Canaccord Capital (Europe) Limited;
(d) "Closing" means the completion of the sale and purchase of the
Purchased Securities;
(e) "Closing Date" has the meaning assigned in the Terms;
(f) "Commissions" means the B.C. Securities Commission, the Ontario
Securities Commission and the SEC;
(g) "General Provisions" means those portions of the Subscription
Agreement headed "General Provisions" and contained on page 1 to
8;
(h) "Private Placement" means the offering of the Purchased
Securities on the terms and conditions of the Agency Agreement
and this Subscription Agreement;
(i) "Purchased Securities" has the meaning assigned in the Terms;
(j) "Regulation D" means Regulation D promulgated under the U.S.
Securities Act;
(k) "Regulation S" means Regulation S promulgated under the U.S.
Securities Act;
(l) "Regulatory Authorities" means the Commissions and the TSE;
(m) "SEC" means the Securities and Exchange Commission of the United
States;
(n) "Securities" means the Special Warrants, the Shares, the Warrants
and the Warrant Shares;
(o) "Subscription Agreement" means the first (cover) page, the Terms
on pages 2 to 4, the General Provisions on pages 1 to 8 and the
other schedules and appendixes incorporated by reference;
(p) "Terms" means those portions of the Subscription Agreement headed
"Terms" and contained on page 2 to 4; and
(q) "U.S. Securities Act" means the Securities Act of 1933 (United
States of America), as amended.
1.2 In the Subscription Agreement, the following terms have the
meanings defined in Regulation S: "U.S. Person" and "United States".
1.3 In the Subscription Agreement, unless otherwise specified,
currencies are indicated with the ISO 4217 currency code so that United States
dollars are indicated with the prefix "USD".
1.4 In the Subscription Agreement, other words and phrases that are
capitalized have the meaning assigned in the Subscription Agreement.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1 REPRESENTATIONS BY PURCHASER
The Purchaser represents and warrants to the Issuer that, as at the Agreement
Date and at the Closing:
(a) no prospectus has been filed by the Issuer with the Commissions
in connection with the issuance of the Purchased Securities, the
issuance is exempted from the prospectus requirements of the
Applicable Legislation and:
(i) the Purchaser is restricted from using most of the civil
remedies available under the Applicable Legislation;
(ii) the Purchaser may not receive information that would
otherwise be required to be provided to the Purchaser
under the Applicable Legislation; and
(iii) the Issuer is relieved from certain obligations that would
otherwise apply under the Applicable Legislation;
(b) to the best of the Purchaser's knowledge, the Purchased
Securities were not advertised;
(c) no person has made to the Purchaser any written or oral
representations:
(i) that any person will resell or repurchase the Securities;
(ii) that any person will refund the purchase price of the
Purchased Securities;
(iii) as to the future price or value of any of the Securities;
or
(iv) that the Securities will be listed and posted for trading
on a stock exchange or that application has been made to
list and post the Securities for trading on a stock
exchange, other than the TSE and AMEX;
(d) the Purchaser is not resident in British Columbia or Ontario;
(e) the Purchaser is not a person, company or combination of persons
or companies that is a "control person" of the Issuer as defined
in the Applicable Legislation, will not become a "control person"
by virtue of this purchase of any of the Securities, and does not
intend to act in concert with any other person to form a control
group of the Issuer;
(f) the Purchaser acknowledges that:
(i) no securities commission or similar regulatory authority
has reviewed or passed on the merits of the Securities;
(ii) there is no government or other insurance covering the
Securities;
(iii) there are risks associated with the purchase of the
Securities;
(iv) there are restrictions on the Purchaser's ability to
resell the Securities and it is the responsibility of the
Purchaser to find out what those restrictions are and to
comply with them before selling the Securities; and
(v) the Issuer has advised the Purchaser that the Issuer is
relying on an exemption from the requirements to provide
the Purchaser with a prospectus and to sell securities
through a person registered to sell securities under the
Applicable Legislation and, as a consequence of acquiring
securities pursuant to this exemption, certain
protections, rights and remedies provided by the
Applicable Legislation, including statutory rights of
rescission or damages, will not be available to the
Purchaser;
(g) this subscription has not been solicited in any other manner
contrary to the Applicable Legislation;
(h) the Purchaser is at arm's length (as that term is customarily
defined) with the Issuer;
(i) the Purchaser acknowledges that the Securities are subject to
restrictions on trading in British Columbia and Ontario as
described in the section headed "Legends" on page 3;
(j) the Purchaser acknowledges that the Securities have not been
registered under the U.S. Securities Act and may not be offered
or sold unless registered under the U.S. Securities Act and the
securities laws of all applicable states of the United States or
an exemption from such registration requirements is available;
(k) the Purchaser acknowledges that the Issuer will use its
commercially reasonable efforts to obtain a final receipt for a
Prospectus in British Columbia and Ontario and to procure the
effectiveness of a Registration Statement in the U.S. within 90
days of the Closing;
(l) the Purchaser (or others for whom it is contracting hereunder)
has been advised to consult its own legal and tax advisors with
respect to applicable resale restrictions and tax considerations,
and it (or others for whom it is contracting hereunder) is solely
responsible for compliance with applicable resale restrictions
and applicable tax legislation;
(m) the Purchaser has no knowledge of a "material fact" or "material
change" (as those terms are defined in the Applicable
Legislation) in the affairs of the Issuer that has not been
generally disclosed to the public, save knowledge of this
particular transaction;
(n) the offer made by this subscription is irrevocable (subject to
the Purchaser's right to withdraw the subscription and to
terminate the obligations as set out in this Agreement) and
requires acceptance by the Issuer and approval of the TSE;
(o) the Purchaser has the legal capacity and competence to enter into
and execute this Agreement and to take all actions required
pursuant to the Subscription Agreement and, if the Purchaser is a
corporation it is duly incorporated and validly subsisting under
the laws of its jurisdiction of incorporation and all necessary
approvals by its directors, shareholders and others have been
given to authorize execution of this Agreement on behalf of the
Purchaser;
(p) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of
the terms and provisions of any law applicable to, or the
constating documents of, the Purchaser or of any agreement,
written or oral, to which the Purchaser may be a party or by
which the Purchaser is or may be bound;
(q) this Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding agreement of
the Purchaser enforceable against the Purchaser;
(r) the Purchaser has been independently advised as to the applicable
hold period imposed in respect of the Securities by securities
legislation in the jurisdiction in which the Purchaser resides
and confirms that no representation has been made respecting the
applicable hold periods for the Securities and is
aware of the risks and other characteristics of the Securities
and of the fact that the Purchaser may not be able to resell the
Securities except in accordance with the applicable securities
legislation and regulatory policies;
(s) the Purchaser, and any beneficial purchaser for whom the
Purchaser is acting, is resident in the state or jurisdiction set
out on the first (cover) page of this Agreement;
(t) the Purchaser is capable of assessing the proposed investment as
a result of the Purchaser's financial experience or as a result
of advice received from a registered person other than the Issuer
or any affiliates of the Issuer;
(u) if required by applicable securities legislation, policy or order
or by any securities commission, stock exchange or other
regulatory authority, the Purchaser will execute, deliver, file
and otherwise assist the Issuer in filing, such reports,
undertakings and other documents with respect to the issue of the
Securities as may be required;
(v) the Purchaser acknowledges that the Agent or Canaccord Europe
will receive a commission, agent's warrants,a corporate finance
fee and an administration fee from the Issuer in connection with
this Private Placement;
(w) the Purchaser will not conduct hedging transactions involving the
Shares unless in compliance with the Applicable Legislation;
(x) the Purchaser acknowledges that the Issuer will refuse, and has
instructed its transfer agent to refuse, to register any
transfers of the Purchased Securities or the underlying Shares,
Warrants or Warrants Shares unless such transfer is made in
accordance with regulations pursuant to, or registration under,
the Applicable Legislation (including the U.S. Securities Act) or
pursuant to an available exemption from such registration.
2.2 RELIANCE, INDEMNITY AND NOTIFICATION OF CHANGES
The representations and warranties in the Subscription Agreement (including the
first (cover) page, the Terms on pages 2 to 4, the General Provisions on pages 1
to 8 and the other schedules and appendixes incorporated by reference) are made
by the Purchaser with the intent that they be relied upon by the Issuer and the
Agent in determining its suitability as a purchaser of Purchased Securities, and
the Purchaser hereby agrees to indemnify the Issuer and the Agent against all
losses, claims, costs, expenses and damages or liabilities which any of them may
suffer or incur as a result of reliance thereon. The Purchaser undertakes to
notify the Issuer and the Agent immediately of any change in any representation,
warranty or other information relating to the Purchaser set forth in the
Subscription Agreement (including the first (cover) page, the Terms on pages 2
to 4, the General Provisions on pages 1 to 8 and the other schedules and
appendixes incorporated by reference) which takes place prior to the Closing.
2.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER
3.1 INCORPORATION BY REFERENCE FROM AGENCY AGREEMENT
The Issuer hereby makes in favour of the Purchaser the representations and
warranties of the Issuer contained in the Agency Agreement. The Issuer will
provide to the Purchaser, promptly on request and without charge, an extract
from
the Agency Agreement certified by an officer of the Issuer as a true extract of
the representations and warranties contained in the Agency Agreement.
3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
3.3 EXCLUSION OF LIABILITY OF AGENT
The Purchaser acknowledges that the Agent is acting as an agent in this
transaction and that all warranties, conditions, representations or
stipulations, other than those relating solely to the Agent, whether express or
implied and whether arising hereunder or under prior agreement or statement or
by statute or at common law are expressly those of the Issuer. The Purchaser
acknowledges that no information or representation concerning the Issuer has
been provided to the Purchaser by the Issuer, the Agent or Canaccord Europe
other than those contained in the Subscription Agreement and the Agency
Agreement and that the Purchaser is relying entirely upon the Subscription
Agreement and the Agency Agreement. Any information given or statement made is
given or made without liability or responsibility howsoever arising on the part
of the Agent or Canaccord Europe. No person in the employment of, or acting as
agent of, the Agent or Canaccord Europe has any authority to make or give any
representation or warranty whatsoever in relation to the Issuer or the
Securities. Any information given or statement made is given or made without
liability or responsibility howsoever arising on the part of the Agent or
Canaccord Europe, and the Purchaser hereby releases the Agent and Canaccord
Europe from any claims that may arise in respect of any such information given
or statement made.
4. WITHDRAWAL OF SUBSCRIPTION AND CONTRACTUAL RIGHTS
The Purchaser reserves the right to withdraw this subscription and to terminate
its obligations hereunder at any time before Closing if the Agent terminates its
obligations with respect to the Private Placement under the Agency Agreement and
hereby appoints the Agent as its agent for the purpose of notifying the Issuer
of the withdrawal or termination of this subscription.
If the Purchaser, who acquires Shares and Warrants on the deemed exercise of the
Purchased Securities purchased by it, is or becomes entitled under the
Applicable Legislation to the remedy of rescission by reason of the Prospectus
or any amendment thereto containing a misrepresentation, the Purchaser will be
entitled to rescission not only of the Purchaser's exercise of such Purchased
Securities, but also of its subscription hereunder, and will be entitled in
connection with such rescission to a full refund from the Issuer of all
consideration paid to the Issuer on acquisition of such Purchased Securities.
The foregoing is in addition to any other right or remedy available to the
Purchaser under the Applicable Legislation or otherwise at law.
5. CLOSING
5.1 The Purchaser acknowledges that there is a risk that insufficient
funds may be raised on the Closing to fund the Issuer's business objectives.
5.2 On or before the end of the fifth business day before the Closing
Date, the Purchaser will deliver to the Issuer or the Agent the Subscription
Agreement and all applicable schedules and required forms, duly executed, and
payment in full for the total price of the Purchased Securities to be purchased
by the Purchaser.
5.3 At Closing, the Issuer will deliver to the Agent the certificates
representing the Purchased Securities purchased by the Purchaser registered in
the name of the Purchaser or its nominee.
6. INDEMNITY IN CONNECTION WITH REGISTRATION STATEMENT
The Purchaser hereby indemnifies the Issuer, its affiliates, any person who
signed the Registration Statement, and their respective officers, directors and
control persons against all such losses, claims, damages, liabilities and
expenses (including but not limited to reasonable expenses incurred in
investigating, preparing and defending against any claim) insofar as they arise
out of or are based upon or are caused by any untrue statement or alleged untrue
statement or any omission or alleged omission based on written information
furnished to the Issuer by or on behalf of the Purchaser for the inclusion in
any Registration Statement or prospectus (and any amendments or supplements
thereto).
7. MISCELLANEOUS
7.1 The Purchaser was introduced to the Issuer by the Agent or
Canaccord Europe under the terms of the Agency Agreement.
7.2 The Purchaser agrees to sell, assign or transfer the Securities
only in accordance with the requirements of Applicable Legislation and any
legends placed on the Securities as contemplated by the Subscription Agreement.
7.3 The Purchaser hereby irrevocably authorizes the Agent, in its
sole discretion:
(a) to act as the Purchaser's representative at the Closing, to
receive certificates for Purchased Securities subscribed for and
to execute in its name and on its behalf all closing receipts and
documents required; and
(b) to waive, in whole or in part, any representations, warranties,
covenants or conditions for the benefit of the Purchaser
contained in the Subscription Agreement or in any agreement or
document ancillary or related to the Private Placement.
7.4 The Purchaser hereby authorizes the Issuer to correct any minor
errors in, or complete any minor information missing from any part of the
Subscription Agreement and any other schedules, forms, certificates or documents
executed by the Purchaser and delivered to the Issuer in connection with the
Private Placement.
7.5 The Issuer and the Agent will be entitled to rely on delivery by
fax machine of an executed copy of this subscription, and acceptance by the
Issuer of such faxed copy will be equally effective to create a valid and
binding agreement between the Purchaser and the Issuer in accordance with the
terms of the Subscription Agreement.
7.6 Without limitation, this subscription and the transactions
contemplated hereby are conditional upon and subject to the Issuer receiving the
approval of the TSE and the AMEX to this subscription and the transactions
contemplated hereby.
7.7 This agreement is not assignable or transferable by the parties
hereto without the express written consent of the other party to this Agreement.
7.8 Time is of the essence of this Agreement and will be calculated
in accordance with the provisions of the Interpretation Act (British Columbia).
7.9 Except as expressly provided in this Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Agreement contains the entire agreement between the parties with respect to
the Securities and there are no other terms, conditions, representations or
warranties whether expressed, implied, oral or written, by statute, by common
law, by the Issuer, by the Agent, or by anyone else.
7.10 The parties to this Agreement may amend this Agreement only in
writing.
7.11 This Agreement enures to the benefit of and is binding upon the
parties to this Agreement and their successors and permitted assigns.
7.12 A party to this Agreement will give all notices to or other
written communications with the other party to this Agreement concerning this
Agreement by hand or by registered mail addressed to the address given above.
7.13 This Agreement is to be read with all changes in gender or number
as required by the context.
7.14 This Agreement will be governed by and construed in accordance
with the internal laws of British Columbia (without reference to its rules
governing the choice or conflict of laws), and the parties hereto irrevocably
attorn and submit to the exclusive jurisdiction of the courts of British
Columbia with respect to any dispute related to this Agreement.
END OF GENERAL PROVISIONS
END OF SUBSCRIPTION AGREEMENT
INSTRUCTIONS TO PURCHASER
1. Complete all the information in the boxes on page 1 and sign where
indicated with an "X".
2. Complete the certification that starts on page 5 and sign where
indicated with an "X" on page 7.
3. Complete the Toronto Stock Exchange private placement questionnaire and
undertaking that starts on page 10 and sign where indicated with an "X"
on page 11.
THIS IS PAGE 1 OF 16 PAGES OF A SUBSCRIPTION AGREEMENT AND RELATED APPENDIXES,
SCHEDULES AND FORMS. COLLECTIVELY, THESE PAGES TOGETHER ARE
REFERRED TO AS THE "SUBSCRIPTION AGREEMENT".
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(UNITED STATES AND OUTSIDE CANADA)
TO: GENETRONICS BIOMEDICAL CORPORATION (the "Issuer"),
San Diego, California, U.S.A.
Subject and pursuant to the terms set out in the Terms on pages 2 to 4, the
General Provisions on pages 1 to 8 and the other schedules and appendixes
incorporated by reference, the undersigned (the "Purchaser") hereby irrevocably
subscribes for, and on Closing will purchase from the Issuer, the following
securities at the following price:
================================================================================
___________________________________________________________ Special Warrants
USD 0.50 per Special Warrant for a total purchase price of USD _____________
The Purchaser holds the following securities of the Issuer:
____________________________________________________________________________
================================================================================
The Purchaser directs the Issuer to issue, register and deliver the certificates
representing the Purchased Securities as follows:
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
REGISTRATION INSTRUCTIONS: DELIVERY INSTRUCTIONS:
_________________________________________ _________________________________________
Name to appear on certificate Name and account reference, if applicable
_________________________________________ _________________________________________
Account reference, if applicable Contact name
_________________________________________ _________________________________________
Address Address
_________________________________________ _________________________________________
Telephone number
------------------------------------------------------------------------------------------
EXECUTED by the Purchaser this _______ day of _____________, 2001.
------------------------------------------------------------------------------------------
WITNESS: EXECUTION BY PURCHASER:
_________________________________________ X __________________________________________
Signature of witness Signature of individual (if Purchaser IS an
individual)
_________________________________________ X __________________________________________
Name of witness Authorized signatory (if Purchaser is NOT an
individual)
_________________________________________ ____________________________________________
Address of witness Name of Purchaser (PLEASE PRINT)
_________________________________________ ____________________________________________
Name of authorized signatory (PLEASE PRINT)
ACCEPTED this ___ day of _________, 2001.
____________________________________________
GENETRONICS BIOMEDICAL CORPORATION Address of Purchaser (residence if an
Per: individual)
_________________________________________
Authorized signatory
------------------------------------------------------------------------------------------
By signing this acceptance, the Issuer agrees to be bound by the Terms on pages
2 to 4, the General Provisions on pages 1 to 8 and the other schedules and
appendixes incorporated by reference.
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 2 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
TERMS
THE REFERENCE DATE OF THIS October 1, 2001
AGREEMENT (THE "AGREEMENT DATE")
THE OFFERING
THE ISSUER Genetronics Biomedical Corporation
THE AGENT The offering is made on a commercially
reasonable efforts basis by Canaccord Capital
(Europe) Limited (which, together with any
sub-agents, is referred to as the "Agent")
under an agency agreement dated for reference
the Agreement Date (the "Agency Agreement").
THE "OFFERING" The offering consists of up to an aggregate
of 4,389,468 non-transferable special
warrants (the "Special Warrants") at USD 0.50
per Special Warrant for proceeds of up to USD
2,194,734. Each Special Warrant is
exercisable without additional payment to
acquire one common share (the "Shares") and
one half share purchase warrant (the
"Warrants"). Each whole Warrant may be
exercised within 18 months from the date of
issuance to the Purchaser to acquire one
common share of the Issuer (the "Warrant
Shares") at a price of USD 0.75 per share.
PROSPECTUS AND CONVERSION RATE The Issuer will use its commercially
INCREASE reasonable efforts to ensure that the
Special Warrants and the underlying Shares
and Warrant Shares will be qualified by a
prospectus in Canada (the "Prospectus") and
the resale of the Shares and Warrant Shares
by the initial purchasers of the Special
Warrants will be the subject of a
registration statement in the U.S. (the
"Registration Statement") (the day on which
final receipt for the Prospectus is received
by the Issuer and on which the Registration
Statement becomes effective or, if different,
the later of such dates, being the
"Qualification Date"). The Issuer will use
its commercially reasonable efforts to have
the Qualification Date occur within 90 days
of the final closing (the "Final Closing") of
this Offering. If the Qualification Date does
not occur within 90 days of Final Closing and
if the Purchaser has provided to the Issuer
all of the information required of them by
the Issuer to permit the Issuer to file the
Registration Statement, the Purchaser will
receive 1.2 Shares and 0.6 Warrants for each
Special Warrant converted.
ADDITIONAL PROVISIONS IN RESPECT Each Special Warrant may be exercised by the
OF THE SPECIAL WARRANTS Purchasers in whole or in part at any time
after each Closing. If, however, the Special
Warrants are exercised prior to the day on
which a final receipt for the Prospectus is
received by the Issuer, the Shares and
Warrant Shares underlying the Special
Warrants and Warrants, respectively, may not
be traded in British Columbia for a period of
six months from Closing and may not be traded
in Ontario for a period of one year from
Closing. If the Special Warrants are
exercised prior to the day on which the
Registration Statement becomes effective, the
Shares and Warrant Shares underlying the
Special Warrants will be subject to
restrictions on trading under the U.S.
Securities Act until at least one year from
Closing.
All unexercised Special Warrants will be
deemed to be exercised on that day which is
the fifth business day after the day on which
final receipt for the Prospectus is received
by the Issuer.
PURCHASED SECURITIES The "Purchased Securities" are Special
Warrants convertible into one common share
and one-half share purchase warrant.
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 3 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
TOTAL AMOUNT A maximum of 4,389,468 Special Warrants.
PRICE USD 0.50 for maximum total proceeds of USD
2,194,734.
WARRANTS Subject to the Applicable Legislation and the
rules and policies of the Toronto Stock
Exchange and the American Stock Exchange, the
Warrants will be non-transferable.
The certificates representing the Warrants
will contain, among other things, the
complete provisions concerning the exercise
of the Warrants and provisions for the
appropriate adjustment in the class and
number of the Warrant Shares issued upon
conversion of the Warrants upon the
occurrence of certain events, including any
subdivision, consolidation or
reclassification of the common shares of the
Issuer, the payment of stock dividends and
the merger of the Issuer.
The Warrants will not restrict or prevent the
Issuer from obtaining any other financing, or
from issuing additional securities or rights.
SELLING JURISDICTIONS Xxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
and certain offshore jurisdictions outside of
Canada and the United States.
"CLOSING DATE" October 17, 2001, or at such other date as
agreed by the Issuer and the Agent.
LEGENDS The certificates representing the Securities
will be endorsed with only the following
legends:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A HOLD PERIOD AND
MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL
12:01 A.M. ON [DATE SIX MONTHS AND ONE DAY
FROM CLOSING] OR IN ONTARIO UNTIL 12:01 A.M.
ON [IN THE CASE OF THE SPECIAL WARRANTS AND
WARRANTS, DATE 18 MONTHS AND ONE DAY FROM
CLOSING AND, IN THE CASE OF THE UNDERLYING
SHARES, DATE ONE YEAR AND ONE DAY FROM
CLOSING] EXCEPT AS PERMITTED BY THE TORONTO
STOCK EXCHANGE AND THE APPLICABLE SECURITIES
LEGISLATION IN THOSE JURISDICTIONS.
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE CORPORATION
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE
CORPORATION, (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER OR
ANOTHER APPLICABLE EXEMPTION, OR (C) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT.
DELIVERY OF THIS CERTIFICATE MAY NOT
CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
THE ISSUER
JURISDICTION OF ORGANIZATION The Issuer is incorporated under the laws of
Delaware.
AUTHORIZED AND OUTSTANDING The authorized capital of the Issuer is
CAPITAL 100,000,000 shares of common stock with a par
value of $0.001 per share and 10,000,000
shares of preferred stock
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 4 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
with a par value of $0.01 per share. As of
October 1, 2001, the issued capital of the
Issuer is 33,759,968 shares of common stock.
STOCK EXCHANGE LISTINGS Shares of the Issuer are listed on the
Toronto Stock Exchange (the "TSE") and the
American Stock Exchange ("AMEX")
"SECURITIES LEGISLATION The Securities Act (Ontario), R.S.O. 1990, c.
APPLICABLE TO THE ISSUER" OR S.5, as amended (the "Ontario Act") (pursuant
"APPLICABLE LEGISLATION" to which the Issuer is a "reporting issuer"),
the Securities Act, R.S.B.C. 1996, c. 418, as
amended (the "B.C. Act") (pursuant to which
the Issuer is a "reporting issuer"), and the
U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act") (to the extent that
the U.S. Securities Act is applicable on the
issuance of securities to U.S. Persons or to
non-U.S. Persons under Regulation D, all of
which terms are terms are defined below),
together with the regulations and rules made
and promulgated thereunder and all
administrative policy statements, blanket
orders and rulings, notices, and other
administrative directions issued by the
Commissions (as defined below), along with
the rules and policies of the TSE (the "TSE
Policies") and the rules and policies of the
AMEX (the "AMEX Policies").
"APPLICABLE EXEMPTIONS" The Offering is being made in accordance with
the exemptions from, or the non-applicability
of, the registration and prospectus
requirements (the "Applicable Exemptions") of
the Applicable Legislation as provided in an
Interpretation Note regarding "offshore"
distributions published by the Ontario
Securities Commission, BCI 72-503 of the B.C.
Securities Commission, sections 35(1)(5) and
72(1)(d) of the Ontario Act, sections
45(1)(5) and 74(2)(4) of the B.C. Act and
Regulation D of the U.S. Securities Act.
END OF TERMS
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 5 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
CERTIFICATION FOR U.S. SECURITIES LAW COMPLIANCE
(Capitalized terms not specifically defined in this Certification have the
meaning ascribed to them in the Subscription Agreement to which this Schedule is
attached.)
In connection with the execution of the Subscription Agreement to which this
Schedule is attached, the Purchaser represents and warrants to the Issuer that:
(a) It has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in
the Purchased Securities and it is able to bear the economic risk of
loss of its entire investment.
(b) The Issuer has provided to it the opportunity to ask questions and
receive answers concerning the terms and conditions of the Offering and
it has had access to such information concerning the Issuer as it has
considered necessary or appropriate in connection with its investment
decision to acquire the Purchased Securities.
(c) It is acquiring the Purchased Securities for its own account, for
investment purposes only and not with a view to any resale, distribution
or other disposition of the Purchased Securities in violation of the
United States securities laws.
(d) It understands the Purchased Securities have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the "1933
Act") or the securities laws of any state of the United States and that
the sale contemplated hereby is being made in reliance on an exemption
from such registration requirements. It further understands that, while
the Issuer has agreed to use its best efforts to file a registration
statement in respect of the Purchaser's resale of the Shares and the
Warrant Shares (the "Registration Statement"), in compliance with the
U.S. Securities Act with the United States Securities and Exchange
Commission, and to have the Registration Statement declared effective,
there can be no assurance the Issuer will be able to do so. It also
understands that it will be required to furnish certain information
about it and its holdings of the Issuer's shares as part of the
information that will be included in the Registration Statement.
(e) It satisfies one or more of the categories indicated below (please
initial the appropriate lines):
____ Category 1. An organization described in Section 501(c)(3) of
the United States Internal Revenue Code, a
corporation, a Massachusetts or similar business
trust or partnership, not formed for the specific
purpose of acquiring the Purchased Securities, with
total assets in excess of USD 5,000,000;
____ Category 2. A natural person whose individual net worth, or
joint net worth with that person's spouse, at the
date of this Certification exceeds USD 1,000,000;
____ Category 3. A natural person who had an individual income in
excess of USD 200,000 in each of the two most
recent years or joint income with that person's
spouse in excess of USD 300,000 in each of those
years and has a reasonable expectation of reaching
the same income level in the current year;
____ Category 4. A trust that (a) has total assets in excess of USD
5,000,000, (b) was not formed for the specific
purpose of acquiring the Purchased Securities and
(c) is directed in its purchases of securities by a
person who has such knowledge and experience in
financial and business matters that he/she is
capable of evaluating the merits and risks of an
investment in the Purchased Securities;
____ Category 5. An investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48)
of that Act;
____ Category 6. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act
of 1958;
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 6 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
____ Category 7. A private business development company as defined
in Section 202(a)(22) of the Investment Advisors
Act of 1940; or
____ Category 8. An entity in which all of the equity owners satisfy
the requirements of one or more of the foregoing
categories.
(f) It has not purchased the Purchased Securities as a result of any form of
general solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or
other form of telecommunications, including electronic display, or any
seminar or meeting whose attendees have been invited by general
solicitation or general advertising.
(g) If it decides to offer, sell or otherwise transfer any of the Purchased
Securities or the underlying Shares, Warrants or Warrant Shares, it will
not offer, sell or otherwise transfer any of such securities directly or
indirectly, unless:
(i) the sale is to the Issuer;
(ii) the sale is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the
U.S. Securities Act and in compliance with applicable local laws
and regulations;
(iii) the sale is made pursuant to the exemption from the registration
requirements under the U.S. Securities Act provided by Rule 144
thereunder and in accordance with any applicable state securities
or "blue sky" laws;
(iv) the Purchased Securities are sold in a transaction that does not
require registration under the U.S. Securities Act or any
applicable state laws and regulations governing the offer and
sale of securities, and it has prior to such sale furnished to
the Issuer an opinion of counsel reasonably satisfactory to the
Issuer to the effect that such transaction does not require
registration; or
(v) the sale is made pursuant to an effective registration statement
filed under the U.S. Securities Act.
(h) The Purchased Securities and the underlying Shares, Warrants and Warrant
Shares are "restricted securities" as that term is defined in the U.S.
Securities Act, and the certificates representing the Purchased
Securities and the Shares, Warrants and Warrant Shares issued upon
conversion of the Purchased Securities, as well as all certificates
issued in exchange for or in substitution of the foregoing, until such
time as is no longer required under the applicable requirements of the
U.S. Securities Act or applicable state securities laws, will bear, on
the face of such certificate, a legend in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER OR ANOTHER APPLICABLE EXEMPTION,
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. DELIVERY
OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
(i) It understands and agrees that there may be material tax consequences to
the Purchaser of an acquisition or disposition of the Securities. The
Issuer gives no opinion and makes no representation with respect to the
tax consequences to the Purchaser under United States, state, local or
foreign tax law of the undersigned's acquisition or disposition of such
Securities.
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 7 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
(j) It understands and agrees that the financial statements of the Issuer
have been prepared in accordance with Canadian generally accepted
accounting principles with a reconciliation to United States generally
accepted accounting principles.
(k) It consents to the Issuer making a notation on its records or giving
instructions to any transfer agent of the Issuer in order to implement
the restrictions on transfer set forth and described in this
Certification and the Subscription Agreement.
Dated _______________ 2001.
X __________________________________________
Signature of individual (if Purchaser IS an
individual)
X __________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
____________________________________________
Name of Purchaser (PLEASE PRINT)
____________________________________________
Name of authorized signatory (PLEASE PRINT)
____________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 8 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser of listed
securities or securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the securities (the "Issuer")
Genetronics Biomedical Corporation
(b) Number and class of securities to be purchased
____________________ Special Warrants; each Special Warrant is exercisable
without additional payment to acquire one common share (the "Shares") and
one half share purchase warrant (the "Warrants"); each whole Warrant may be
exercised within 18 months from the date of issuance to the Purchaser to
acquire one common share of the Issuer (the "Warrant Shares") at a price of
USD 0.75 per share.
(c) Purchase price
USD 0.50 per Special Warrant
2. DETAILS OF PURCHASER
(a) Name of purchaser
_________________________________________________________________
(b) Address
_________________________________________________________________
_________________________________________________________________
(c) Names and addresses of persons having a greater than 10%
beneficial interest in the purchaser
_________________________________________________________________
_________________________________________________________________
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above)
an insider of the Issuer for the purposes of the Ontario
Securities Act (before giving effect to this private placement)?
If so, state the capacity in which the purchaser (or person named
in response to 2(c)) qualifies as an insider
_________________________________________________________________
SUBSCRIPTION AGREEMENT (WITH RELATED PAGE 9 OF 16 PAGES
APPENDIXES, SCHEDULES AND FORMS)
(b) If the answer to (a) is "no", are the purchaser and the Issuer
controlled by the same person or company? If so, give details
_________________________________________________________________
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the
securities of the Issuer (other than debt securities which are not
convertible into equity securities), directly or indirectly, within the
60 days preceding the date hereof
________________________________________________________________________
________________________________________________________________________
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period that
expires on the earlier of six months from the date of the closing of the
transaction herein and the issuance of a receipt by the Ontario Securities
Commission for a final prospectus qualifying the distribution of the Shares and
the Warrants, without the prior consent of The Toronto Stock Exchange and any
other regulatory body having jurisdiction.
Dated _______________ 2001.
X __________________________________________
Signature of individual (if Purchaser IS an
individual)
X __________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
____________________________________________
Name of Purchaser (PLEASE PRINT)
____________________________________________
Name of authorized signatory (PLEASE PRINT)
____________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
GENERAL PROVISIONS
1. DEFINITIONS
1.1 In the Subscription Agreement (including the first (cover) page,
the Terms on pages 2 to 4, the General Provisions on pages 1 to
8 and the other schedules and appendixes incorporated by
reference), the following words have the following meanings
unless otherwise indicated:
(a) "Agent" has the meaning assigned in the Terms;
(b) "Applicable Legislation" means the Securities Legislation
Applicable to the Issuer (as defined on page 4) and all
legislation incorporated in the definition of this term in other
parts of the Subscription Agreement, together with the
regulations and rules made and promulgated under that legislation
and all administrative policy statements, blanket orders and
rulings, notices and other administrative directions issued by
the Commissions;
(c) "Closing" means the completion of the sale and purchase of the
Purchased Securities;
(d) "Closing Date" has the meaning assigned in the Terms;
(e) "Commissions" means the B.C. Securities Commission, the Ontario
Securities Commission and the SEC;
(f) "Final Closing" means the last closing under the Private
Placement;
(g) "General Provisions" means those portions of the Subscription
Agreement headed "General Provisions" and contained on page 1 to
8;
(h) "Private Placement" means the offering of the Purchased
Securities on the terms and conditions of the Agency Agreement
and this Subscription Agreement;
(i) "Purchased Securities" has the meaning assigned in the Terms;
(j) "Regulation D" means Regulation D promulgated under the U.S.
Securities Act;
(k) "Regulation S" means Regulation S promulgated under the U.S.
Securities Act;
(l) "Regulatory Authorities" means the Commissions and the TSE;
(m) "SEC" means the Securities and Exchange Commission of the United
States;
(n) "Securities" means the Special Warrants, the Shares, the Warrants
and the Warrant Shares;
(o) "Subscription Agreement" means the first (cover) page, the Terms
on pages 2 to 4, the General Provisions on pages 1 to 8 and the
other schedules and appendixes incorporated by reference;
(p) "Terms" means those portions of the Subscription Agreement headed
"Terms" and contained on page 2 to 4; and
(q) "U.S. Securities Act" means the Securities Act of 1933 (United
States of America), as amended.
1.2 In the Subscription Agreement, the following terms have the
meanings defined in Regulation S: "U.S. Person" and "United States".
1.3 In the Subscription Agreement, unless otherwise specified,
currencies are indicated with the ISO 4217 currency code so that United States
dollars are indicated with the prefix "USD".
1.4 In the Subscription Agreement, other words and phrases that are
capitalized have the meaning assigned in the Subscription Agreement.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1 REPRESENTATIONS BY PURCHASER
The Purchaser represents and warrants to the Issuer that, as at the Agreement
Date and at the Closing:
(a) no prospectus has been filed by the Issuer with the Commissions
in connection with the issuance of the Purchased Securities, the
issuance is exempted from the prospectus requirements of the
Applicable Legislation and:
(i) the Purchaser is restricted from using most of the civil
remedies available under the Applicable Legislation;
(ii) the Purchaser may not receive information that would
otherwise be required to be provided to the Purchaser
under the Applicable Legislation; and
(iii) the Issuer is relieved from certain obligations that would
otherwise apply under the Applicable Legislation;
(b) to the best of the Purchaser's knowledge, the Purchased
Securities were not advertised;
(c) no person has made to the Purchaser any written or oral
representations:
(i) that any person will resell or repurchase the Securities;
(ii) that any person will refund the purchase price of the
Purchased Securities;
(iii) as to the future price or value of any of the Securities;
or
(iv) that the Securities will be listed and posted for trading
on a stock exchange or that application has been made to
list and post the Securities for trading on a stock
exchange, other than the TSE and AMEX;
(d) the Purchaser is not resident in British Columbia or Ontario;
(e) the Purchaser is not a person, company or combination of persons
or companies that is a "control person" of the Issuer as defined
in the Applicable Legislation, will not become a "control person"
by virtue of this purchase of any of the Securities, and does not
intend to act in concert with any other person to form a control
group of the Issuer;
(f) the Purchaser acknowledges that:
(i) no securities commission or similar regulatory authority
has reviewed or passed on the merits of the Securities;
(ii) there is no government or other insurance covering the
Securities;
(iii) there are risks associated with the purchase of the
Securities;
(iv) there are restrictions on the Purchaser's ability to
resell the Securities and it is the responsibility of the
Purchaser to find out what those restrictions are and to
comply with them before selling the Securities; and
(v) the Issuer has advised the Purchaser that the Issuer is
relying on an exemption from the requirements to provide
the Purchaser with a prospectus and to sell securities
through a person registered to sell securities under the
Applicable Legislation and, as a consequence of acquiring
securities pursuant to this exemption, certain
protections, rights and remedies provided by the
Applicable Legislation, including statutory rights of
rescission or damages, will not be available to the
Purchaser;
(g) this subscription has not been solicited in any other manner
contrary to the Applicable Legislation;
(h) the Purchaser is at arm's length (as that term is customarily
defined) with the Issuer;
(i) the Purchaser acknowledges that the Securities are subject to
restrictions on trading in British Columbia and Ontario as
described in the section headed "Legends" on page 3;
(j) the Purchaser acknowledges that the Securities have not been
registered under the U.S. Securities Act and may not be offered
or sold unless registered under the U.S. Securities Act and the
securities laws of all applicable states of the United States or
an exemption from such registration requirements is available;
(k) the Purchaser acknowledges that the Issuer will use its
commercially reasonable efforts to obtain a final receipt for a
Prospectus in British Columbia and Ontario and to procure the
effectiveness of a Registration Statement in the U.S. within 90
days of the Final Closing;
(l) the Purchaser (or others for whom it is contracting hereunder)
has been advised to consult its own legal and tax advisors with
respect to applicable resale restrictions and tax considerations,
and it (or others for whom it is contracting hereunder) is solely
responsible for compliance with applicable resale restrictions
and applicable tax legislation;
(m) the Purchaser has no knowledge of a "material fact" or "material
change" (as those terms are defined in the Applicable
Legislation) in the affairs of the Issuer that has not been
generally disclosed to the public, save knowledge of this
particular transaction;
(n) the offer made by this subscription is irrevocable (subject to
the Purchaser's right to withdraw the subscription and to
terminate the obligations as set out in this Agreement) and
requires acceptance by the Issuer and approval of the TSE;
(o) the Purchaser has the legal capacity and competence to enter into
and execute this Agreement and to take all actions required
pursuant to the Subscription Agreement and, if the Purchaser is a
corporation it is duly incorporated and validly subsisting under
the laws of its jurisdiction of incorporation and all necessary
approvals by its directors, shareholders and others have been
given to authorize execution of this Agreement on behalf of the
Purchaser;
(p) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of
the terms and provisions of any law applicable to, or the
constating documents of, the Purchaser or of any agreement,
written or oral, to which the Purchaser may be a party or by
which the Purchaser is or may be bound;
(q) this Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding agreement of
the Purchaser enforceable against the Purchaser;
(r) the Purchaser has been independently advised as to the applicable
hold period imposed in respect of the Securities by securities
legislation in the jurisdiction in which the Purchaser resides
and confirms that no representation has been made respecting the
applicable hold periods for the Securities and is
aware of the risks and other characteristics of the Securities
and of the fact that the Purchaser may not be able to resell the
Securities except in accordance with the applicable securities
legislation and regulatory policies;
(s) the Purchaser, and any beneficial purchaser for whom the
Purchaser is acting, is resident in the province or jurisdiction
set out on the first (cover) page of this Agreement;
(t) the Purchaser is capable of assessing the proposed investment as
a result of the Purchaser's financial experience or as a result
of advice received from a registered person other than the Issuer
or any affiliates of the Issuer;
(u) if required by applicable securities legislation, policy or order
or by any securities commission, stock exchange or other
regulatory authority, the Purchaser will execute, deliver, file
and otherwise assist the Issuer in filing, such reports,
undertakings and other documents with respect to the issue of the
Securities as may be required;
(v) the Purchaser acknowledges that the Agent will receive a
commission, agent's warrants and a corporate finance fee from the
Issuer in connection with this Private Placement;
(w) the Purchaser will not conduct hedging transactions involving the
Shares unless in compliance with the Applicable Legislation;
(x) the Purchaser acknowledges that the Issuer will refuse, and has
instructed its transfer agent to refuse, to register any
transfers of the Purchased Securities or the underlying Shares,
Warrants or Warrants Shares unless such transfer is made in
accordance with regulations pursuant to, or registration under,
the Applicable Legislation (including the U.S. Securities Act) or
pursuant to an available exemption from such registration.
2.2 RELIANCE, INDEMNITY AND NOTIFICATION OF CHANGES
The representations and warranties in the Subscription Agreement (including the
first (cover) page, the Terms on pages 2 to 4, the General Provisions on pages 1
to 8 and the other schedules and appendixes incorporated by reference) are made
by the Purchaser with the intent that they be relied upon by the Issuer and the
Agent in determining its suitability as a purchaser of Purchased Securities, and
the Purchaser hereby agrees to indemnify the Issuer and the Agent against all
losses, claims, costs, expenses and damages or liabilities which any of them may
suffer or incur as a result of reliance thereon. The Purchaser undertakes to
notify the Issuer and the Agent immediately of any change in any representation,
warranty or other information relating to the Purchaser set forth in the
Subscription Agreement (including the first (cover) page, the Terms on pages 2
to 4, the General Provisions on pages 1 to 8 and the other schedules and
appendixes incorporated by reference) which takes place prior to the Closing.
2.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER
3.1 INCORPORATION BY REFERENCE FROM AGENCY AGREEMENT
The Issuer hereby makes in favour of the Purchaser the representations and
warranties of the Issuer contained in the Agency Agreement. The Issuer will
provide to the Purchaser, promptly on request and without charge, an extract
from the Agency Agreement certified by an officer of the Issuer as a true
extract of the representations and warranties contained in the Agency Agreement.
3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
3.3 EXCLUSION OF LIABILITY OF AGENT
The Purchaser acknowledges that the Agent is acting as an agent in this
transaction and that all warranties, conditions, representations or
stipulations, other than those relating solely to the Agent, whether express or
implied and whether arising hereunder or under prior agreement or statement or
by statute or at common law are expressly those of the Issuer. The Purchaser
acknowledges that no information or representation concerning the Issuer has
been provided to the Purchaser by the Issuer or the Agent other than those
contained in the Subscription Agreement and the Agency Agreement and that the
Purchaser is relying entirely upon the Subscription Agreement and the Agency
Agreement. Any information given or statement made is given or made without
liability or responsibility howsoever arising on the part of the Agent. No
person in the employment of, or acting as agent of, the Agent has any authority
to make or give any representation or warranty whatsoever in relation to the
Issuer or the Securities. Any information given or statement made is given or
made without liability or responsibility howsoever arising on the part of the
Agent, and the Purchaser hereby releases the Agent from any claims that may
arise in respect of any such information given or statement made.
4. WITHDRAWAL OF SUBSCRIPTION AND CONTRACTUAL RIGHTS
The Purchaser reserves the right to withdraw this subscription and to terminate
its obligations hereunder at any time before Closing if the Agent terminates its
obligations with respect to the Private Placement under the Agency Agreement and
hereby appoints the Agent as its agent for the purpose of notifying the Issuer
of the withdrawal or termination of this subscription.
If the Purchaser, who acquires Shares and Warrants on the deemed exercise of the
Purchased Securities purchased by it, is or becomes entitled under the
Applicable Legislation to the remedy of rescission by reason of the Prospectus
or any amendment thereto containing a misrepresentation, the Purchaser will be
entitled to rescission not only of the Purchaser's exercise of such Purchased
Securities, but also of its subscription hereunder, and will be entitled in
connection with such rescission to a full refund from the Issuer of all
consideration paid to the Issuer on acquisition of such Purchased Securities.
The foregoing is in addition to any other right or remedy available to the
Purchaser under the Applicable Legislation or otherwise at law.
5. CLOSING
5.1 The Purchaser acknowledges that, although Purchased Securities
may be issued to other purchasers under the Private Placement concurrently with
the Closing, there may be other sales of Purchased Securities under the Private
Placement, some or all of which may close after the Closing. The Purchaser
further acknowledges that there is a risk that insufficient funds may be raised
on the Closing to fund the Issuer's business objectives and that further
closings may not take place after the Closing.
5.2 On or before the end of the fifth business day before the Closing
Date, the Purchaser will deliver to the Issuer or the Agent the Subscription
Agreement and all applicable schedules and required forms, duly executed, and
payment in full for the total price of the Purchased Securities to be purchased
by the Purchaser.
5.3 At Closing, the Issuer will deliver to the Agent the certificates
representing the Purchased Securities purchased by the Purchaser registered in
the name of the Purchaser or its nominee.
6. INDEMNITY IN CONNECTION WITH REGISTRATION STATEMENT
The Purchaser hereby indemnifies the Issuer, its affiliates, any person who
signed the Registration Statement, and their respective officers, directors and
control persons against all such losses, claims, damages, liabilities and
expenses (including but not limited to reasonable expenses incurred in
investigating, preparing and defending against any claim) insofar as they arise
out of or are based upon or are caused by any untrue statement or alleged untrue
statement or any omission or alleged omission based on written information
furnished to the Issuer by or on behalf of the Purchaser for the inclusion in
any Registration Statement or prospectus (and any amendments or supplements
thereto).
7. MISCELLANEOUS
7.1 The Purchaser was introduced to the Issuer by the Agent under the
terms of the Agency Agreement.
7.2 The Purchaser agrees to sell, assign or transfer the Securities
only in accordance with the requirements of Applicable Legislation and any
legends placed on the Securities as contemplated by the Subscription Agreement.
7.3 The Purchaser hereby irrevocably authorizes the Agent, in its
sole discretion:
(a) to act as the Purchaser's representative at the Closing, to
receive certificates for Purchased Securities subscribed for and
to execute in its name and on its behalf all closing receipts and
documents required; and
(b) to waive, in whole or in part, any representations, warranties,
covenants or conditions for the benefit of the Purchaser
contained in the Subscription Agreement or in any agreement or
document ancillary or related to the Private Placement.
7.4 The Purchaser hereby authorizes the Issuer to correct any minor
errors in, or complete any minor information missing from any part of the
Subscription Agreement and any other schedules, forms, certificates or documents
executed by the Purchaser and delivered to the Issuer in connection with the
Private Placement.
7.5 The Issuer and the Agent will be entitled to rely on delivery by
fax machine of an executed copy of this subscription, and acceptance by the
Issuer of such faxed copy will be equally effective to create a valid and
binding agreement between the Purchaser and the Issuer in accordance with the
terms of the Subscription Agreement.
7.6 Without limitation, this subscription and the transactions
contemplated hereby are conditional upon and subject to the Issuer receiving the
approval of the TSE and the AMEX to this subscription and the transactions
contemplated hereby.
7.7 This agreement is not assignable or transferable by the parties
hereto without the express written consent of the other party to this Agreement.
7.8 Time is of the essence of this Agreement and will be calculated
in accordance with the provisions of the Interpretation Act (British Columbia).
7.9 Except as expressly provided in this Agreement and in the
agreements, instruments and other documents contemplated or provided for herein,
this Agreement contains the entire agreement between the parties with
respect to the Securities and there are no other terms, conditions,
representations or warranties whether expressed, implied, oral or written, by
statute, by common law, by the Issuer, by the Agent, or by anyone else.
7.10 The parties to this Agreement may amend this Agreement only in
writing.
7.11 This Agreement enures to the benefit of and is binding upon the
parties to this Agreement and their successors and permitted assigns.
7.12 A party to this Agreement will give all notices to or other
written communications with the other party to this Agreement concerning this
Agreement by hand or by registered mail addressed to the address given above.
7.13 This Agreement is to be read with all changes in gender or number
as required by the context.
7.14 This Agreement will be governed by and construed in accordance
with the internal laws of British Columbia (without reference to its rules
governing the choice or conflict of laws), and the parties hereto irrevocably
attorn and submit to the exclusive jurisdiction of the courts of British
Columbia with respect to any dispute related to this Agreement.
END OF GENERAL PROVISIONS
END OF SUBSCRIPTION AGREEMENT
INSTRUCTIONS TO PURCHASER
1. Complete all the information in the boxes on page 1 and sign where
indicated with an "X".
2. Complete the certification that starts on page 5 and sign where
indicated with an "X" on page 7.
3. Complete the Toronto Stock Exchange private placement questionnaire and
undertaking that starts on page 10 and sign where indicated with an "X"
on page 11.
THIS IS PAGE 1 OF 17 PAGES OF A SUBSCRIPTION AGREEMENT AND RELATED APPENDIXES,
SCHEDULES AND FORMS. COLLECTIVELY, THESE PAGES TOGETHER ARE
REFERRED TO AS THE"SUBSCRIPTION AGREEMENT".
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(ONTARIO $150,000 MINIMUM SUBSCRIPTION)
TO: GENETRONICS BIOMEDICAL CORPORATION (the "Issuer"),
San Diego, California, U.S.A.
Subject and pursuant to the terms set out in the Terms on pages 2 to 4, the
General Provisions on pages 1 to 8 and the other schedules and appendixes
incorporated by reference, the undersigned (the "Purchaser") hereby irrevocably
subscribes for, and on Closing will purchase from the Issuer, the following
securities at the following price:
================================================================================
___________________________________________________________ Special Warrants
USD 0.50 per Special Warrant for a total purchase price of USD _____________
The Purchaser holds the following securities of the Issuer:
____________________________________________________________________________
================================================================================
The Purchaser directs the Issuer to issue, register and deliver the certificates
representing the Purchased Securities as follows:
--------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
REGISTRATION INSTRUCTIONS: DELIVERY INSTRUCTIONS:
_________________________________________ _________________________________________
Name to appear on certificate Name and account reference, if applicable
_________________________________________ _________________________________________
Account reference, if applicable Contact name
_________________________________________ _________________________________________
Address Address
_________________________________________ _________________________________________
Telephone number
------------------------------------------------------------------------------------------
EXECUTED by the Purchaser this _______ day of _____________, 2001.
------------------------------------------------------------------------------------------
WITNESS: EXECUTION BY PURCHASER:
_________________________________________ X __________________________________________
Signature of witness Signature of individual (if Purchaser IS an
individual)
_________________________________________ X __________________________________________
Name of witness Authorized signatory (if Purchaser is NOT an
individual)
_________________________________________ ____________________________________________
Address of witness Name of Purchaser (PLEASE PRINT)
_________________________________________ ____________________________________________
Name of authorized signatory (PLEASE PRINT)
ACCEPTED this ___ day of _________, 2001.
____________________________________________
GENETRONICS BIOMEDICAL CORPORATION Address of Purchaser (residence if an
Per: individual)
_________________________________________
Authorized signatory
------------------------------------------------------------------------------------------
By signing this acceptance, the Issuer agrees to be bound by the Terms on pages
2 to 4, the General Provisions on pages 1 to 8 and the other schedules and
appendixes incorporated by reference.
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 2 OF 17 PAGES
SCHEDULES AND FORMS)
TERMS
THE REFERENCE DATE OF THIS October 1, 2001
AGREEMENT (THE "AGREEMENT DATE")
THE OFFERING
THE ISSUER Genetronics Biomedical Corporation
THE AGENT The offering is made on a commercially
reasonable efforts basis by Canaccord Capital
(Europe) Limited (which, together with any
sub-agents, is referred to as the "Agent")
under an agency agreement dated for reference
the Agreement Date (the "Agency Agreement").
THE "OFFERING" The offering consists of up to an aggregate
of 4,389,468 non-transferable special
warrants (the "Special Warrants") at USD 0.50
per Special Warrant for proceeds of up to USD
2,194,734. Each Special Warrant is
exercisable without additional payment to
acquire one common share (the "Shares") and
one half share purchase warrant (the
"Warrants"). Each whole Warrant may be
exercised within 18 months from the date of
issuance to the Purchaser to acquire one
common share of the Issuer (the "Warrant
Shares") at a price of USD 0.75 per share.
PROSPECTUS AND CONVERSION RATE The Issuer will use its commercially
INCREASE reasonable efforts to ensure that the Special
Warrants and the underlying Shares and
Warrant Shares will be qualified by a
prospectus in Canada (the "Prospectus") and
the resale of the Shares and Warrant Shares
by the initial purchasers of the Special
Warrants will be the subject of a
registration statement in the U.S. (the
"Registration Statement") (the day on which
final receipt for the Prospectus is received
by the Issuer and on which the Registration
Statement becomes effective or, if different,
the later of such dates, being the
"Qualification Date"). The Issuer will use
its commercially reasonable efforts to have
the Qualification Date occur within 90 days
of the final closing (the "Final Closing") of
this Offering. If the Qualification Date does
not occur within 90 days of Final Closing and
if the Purchaser has provided to the Issuer
all of the information required of them by
the Issuer to permit the Issuer to file the
Registration Statement, the Purchaser will
receive 1.2 Shares and 0.6 Warrants for each
Special Warrant converted.
ADDITIONAL PROVISIONS IN RESPECT Each Special Warrant may be exercised by the
OF THE SPECIAL WARRANTS Purchasers in whole or in part at any time
after each Closing. If, however, the Special
Warrants are exercised prior to the day on
which a final receipt for the Prospectus is
received by the Issuer, the Shares and
Warrant Shares underlying the Special
Warrants and Warrants, respectively, may not
be traded in British Columbia for a period of
six months from Closing and may not be traded
in Ontario for a period of one year from
Closing. If the Special Warrants are
exercised prior to the day on which the
Registration Statement becomes effective, the
Shares and Warrant Shares underlying the
Special Warrants will be subject to
restrictions on trading under the U.S.
Securities Act until at least one year from
Closing.
All unexercised Special Warrants will be
deemed to be exercised on that day which is
the fifth business day after the day on which
final receipt for the Prospectus is received
by the Issuer.
PURCHASED SECURITIES The "Purchased Securities" are Special
Warrants convertible into one common share
and one-half share purchase warrant.
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 3 OF 17 PAGES
SCHEDULES AND FORMS)
TOTAL AMOUNT A maximum of 4,389,468 Special Warrants.
PRICE USD 0.50 for maximum total proceeds of USD
2,194,734.
WARRANTS Subject to the Applicable Legislation and the
rules and policies of the Toronto Stock
Exchange and the American Stock Exchange, the
Warrants will be non-transferable.
The certificates representing the Warrants
will contain, among other things, the
complete provisions concerning the exercise
of the Warrants and provisions for the
appropriate adjustment in the class and
number of the Warrant Shares issued upon
conversion of the Warrants upon the
occurrence of certain events, including any
subdivision, consolidation or
reclassification of the common shares of the
Issuer, the payment of stock dividends and
the merger of the Issuer.
The Warrants will not restrict or prevent the
Issuer from obtaining any other financing, or
from issuing additional securities or rights.
SELLING JURISDICTIONS Xxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx
and certain offshore jurisdictions outside of
Canada and the United States.
"CLOSING DATE" October 17, 2001, or at such other date as
agreed by the Issuer and the Agent.
LEGENDS The certificates representing the Securities
will be endorsed with only the following
legends:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A HOLD PERIOD AND
MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL
12:01 A.M. ON [DATE SIX MONTHS AND ONE DAY
FROM CLOSING] OR IN ONTARIO UNTIL 12:01 A.M.
ON [IN THE CASE OF THE SPECIAL WARRANTS AND
WARRANTS, DATE 18 MONTHS AND ONE DAY FROM
CLOSING AND, IN THE CASE OF THE UNDERLYING
SHARES, DATE ONE YEAR AND ONE DAY FROM
CLOSING] EXCEPT AS PERMITTED BY THE TORONTO
STOCK EXCHANGE AND THE APPLICABLE SECURITIES
LEGISLATION IN THOSE JURISDICTIONS.
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE CORPORATION
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE
CORPORATION, (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER OR
ANOTHER APPLICABLE EXEMPTION, OR (C) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT.
DELIVERY OF THIS CERTIFICATE MAY NOT
CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
THE ISSUER
JURISDICTION OF ORGANIZATION The Issuer is incorporated under the laws of
Delaware.
AUTHORIZED AND OUTSTANDING The authorized capital of the Issuer is
CAPITAL 100,000,000 shares of common stock with a par
value of $0.001 per share and 10,000,000
shares of preferred stock
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 4 OF 17 PAGES
SCHEDULES AND FORMS)
with a par value of $0.01 per share. As of
October 1, 2001, the issued capital of the
Issuer is 33,759,968 shares of common stock.
STOCK EXCHANGE LISTINGS Shares of the Issuer are listed on the
Toronto Stock Exchange (the "TSE") and the
American Stock Exchange ("AMEX")
"SECURITIES LEGISLATION The Securities Act (Ontario), R.S.O. 1990, c.
APPLICABLE TO THE ISSUER" OR S.5, as amended (the "Ontario Act") (pursuant
"APPLICABLE LEGISLATION" to which the Issuer is a "reporting issuer"),
the Securities Act, R.S.B.C. 1996, c. 418, as
amended (the "B.C. Act") (pursuant to which
the Issuer is a "reporting issuer"), and the
U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act") (to the extent that
the U.S. Securities Act is applicable on the
issuance of securities to U.S. Persons or to
non-U.S. Persons under Regulation D, all of
which terms are terms are defined below),
together with the regulations and rules made
and promulgated thereunder and all
administrative policy statements, blanket
orders and rulings, notices, and other
administrative directions issued by the
Commissions (as defined below), along with
the rules and policies of the TSE (the "TSE
Policies") and the rules and policies of the
AMEX (the "AMEX Policies").
"APPLICABLE EXEMPTIONS" The Offering is being made in accordance with
the exemptions from, or the non-applicability
of, the registration and prospectus
requirements (the "Applicable Exemptions") of
the Applicable Legislation as provided in an
Interpretation Note regarding "offshore"
distributions published by the Ontario
Securities Commission, BCI 72-503 of the B.C.
Securities Commission, sections 35(1)(5) and
72(1)(d) of the Ontario Act, sections
45(1)(5) and 74(2)(4) of the B.C. Act and
Regulation D of the U.S. Securities Act.
END OF TERMS
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 5 OF 17 PAGES
SCHEDULES AND FORMS)
CERTIFICATION FOR U.S. SECURITIES LAW COMPLIANCE
(Capitalized terms not specifically defined in this Certification have the
meaning ascribed to them in the Subscription Agreement to which this Schedule is
attached.)
In connection with the execution of the Subscription Agreement to which this
Schedule is attached, the Purchaser represents and warrants to the Issuer that:
(a) It has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in
the Purchased Securities and it is able to bear the economic risk of
loss of its entire investment.
(b) The Issuer has provided to it the opportunity to ask questions and
receive answers concerning the terms and conditions of the Offering and
it has had access to such information concerning the Issuer as it has
considered necessary or appropriate in connection with its investment
decision to acquire the Purchased Securities.
(c) It is acquiring the Purchased Securities for its own account, for
investment purposes only and not with a view to any resale, distribution
or other disposition of the Purchased Securities in violation of the
United States securities laws.
(d) It understands the Purchased Securities have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the "1933
Act") or the securities laws of any state of the United States and that
the sale contemplated hereby is being made in reliance on an exemption
from such registration requirements. It further understands that, while
the Issuer has agreed to use its best efforts to file a registration
statement in respect of the Purchaser's resale of the Shares and the
Warrant Shares (the "Registration Statement"), in compliance with the
U.S. Securities Act with the United States Securities and Exchange
Commission, and to have the Registration Statement declared effective,
there can be no assurance the Issuer will be able to do so. It also
understands that it will be required to furnish certain information
about it and its holdings of the Issuer's shares as part of the
information that will be included in the Registration Statement.
(e) It satisfies one or more of the categories indicated below (please
initial the appropriate lines):
____ Category 1. An organization described in Section 501(c)(3) of
the United States Internal Revenue Code, a
corporation, a Massachusetts or similar business
trust or partnership, not formed for the specific
purpose of acquiring the Purchased Securities, with
total assets in excess of USD 5,000,000;
____ Category 2. A natural person whose individual net worth, or
joint net worth with that person's spouse, at the
date of this Certification exceeds USD 1,000,000;
____ Category 3. A natural person who had an individual income in
excess of USD 200,000 in each of the two most
recent years or joint income with that person's
spouse in excess of USD 300,000 in each of those
years and has a reasonable expectation of reaching
the same income level in the current year;
____ Category 4. A trust that (a) has total assets in excess of USD
5,000,000, (b) was not formed for the specific
purpose of acquiring the Purchased Securities and
(c) is directed in its purchases of securities by a
person who has such knowledge and experience in
financial and business matters that he/she is
capable of evaluating the merits and risks of an
investment in the Purchased Securities;
____ Category 5. An investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48)
of that Act;
____ Category 6. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act
of 1958;
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 7 OF 17 PAGES
SCHEDULES AND FORMS)
____ Category 7. A private business development company as defined
in Section 202(a)(22) of the Investment Advisors
Act of 1940; or
____ Category 8. An entity in which all of the equity owners satisfy
the requirements of one or more of the foregoing
categories.
(f) It has not purchased the Purchased Securities as a result of any form of
general solicitation or general advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio, or television, or
other form of telecommunications, including electronic display, or any
seminar or meeting whose attendees have been invited by general
solicitation or general advertising.
(g) If it decides to offer, sell or otherwise transfer any of the Purchased
Securities or the underlying Shares, Warrants or Warrant Shares, it will
not offer, sell or otherwise transfer any of such securities directly or
indirectly, unless:
(i) the sale is to the Issuer;
(ii) the sale is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the
U.S. Securities Act and in compliance with applicable local laws
and regulations;
(iii) the sale is made pursuant to the exemption from the registration
requirements under the U.S. Securities Act provided by Rule 144
thereunder and in accordance with any applicable state securities
or "blue sky" laws;
(iv) the Purchased Securities are sold in a transaction that does not
require registration under the U.S. Securities Act or any
applicable state laws and regulations governing the offer and
sale of securities, and it has prior to such sale furnished to
the Issuer an opinion of counsel reasonably satisfactory to the
Issuer to the effect that such transaction does not require
registration; or
(v) the sale is made pursuant to an effective registration statement
filed under the U.S. Securities Act.
(h) The Purchased Securities and the underlying Shares, Warrants and Warrant
Shares are "restricted securities" as that term is defined in the U.S.
Securities Act, and the certificates representing the Purchased
Securities and the Shares, Warrants and Warrant Shares issued upon
conversion of the Purchased Securities, as well as all certificates
issued in exchange for or in substitution of the foregoing, until such
time as is no longer required under the applicable requirements of the
U.S. Securities Act or applicable state securities laws, will bear, on
the face of such certificate, a legend in substantially the following
form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER OR ANOTHER APPLICABLE EXEMPTION,
OR (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. DELIVERY
OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
(i) It understands and agrees that there may be material tax consequences to
the Purchaser of an acquisition or disposition of the Securities. The
Issuer gives no opinion and makes no representation with respect to the
tax consequences to the Purchaser under United States, state, local or
foreign tax law of the undersigned's acquisition or disposition of such
Securities.
SUBSCRIPTION AGREEMENT (WITH RELATED APPENDIXES, PAGE 7 OF 17 PAGES
SCHEDULES AND FORMS)
(j) It understands and agrees that the financial statements of the Issuer
have been prepared in accordance with Canadian generally accepted
accounting principles with a reconciliation to United States generally
accepted accounting principles.
(k) It consents to the Issuer making a notation on its records or giving
instructions to any transfer agent of the Issuer in order to implement
the restrictions on transfer set forth and described in this
Certification and the Subscription Agreement.
Dated _______________ 2001.
X _________________________________________
Signature of individual (if Purchaser IS an
individual)
X _________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
___________________________________________
Name of Purchaser (PLEASE PRINT)
___________________________________________
Name of authorized signatory (PLEASE PRINT)
___________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser of listed
securities or securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the securities (the "Issuer")
Genetronics Biomedical Corporation
(b) Number and class of securities to be purchased
____________________ Special Warrants; each Special Warrant is exercisable
without additional payment to acquire one common share (the "Shares") and
one half share purchase warrant (the "Warrants"); each whole Warrant may be
exercised within 18 months from the date of issuance to the Purchaser to
acquire one common share of the Issuer (the "Warrant Shares") at a price of
USD 0.75 per share.
(c) Purchase price
USD 0.50 per Special Warrant
2. DETAILS OF PURCHASER
(a) Name of purchaser
_________________________________________________________________
(b) Address
_________________________________________________________________
_________________________________________________________________
(c) Names and addresses of persons having a greater than 10%
beneficial interest in the purchaser
_________________________________________________________________
_________________________________________________________________
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above)
an insider of the Issuer for the purposes of the Ontario
Securities Act (before giving effect to this private placement)?
If so, state the capacity in which the purchaser (or person named
in response to 2(c)) qualifies as an insider
_________________________________________________________________
(b) If the answer to (a) is "no", are the purchaser and the Issuer
controlled by the same person or company? If so, give details
_________________________________________________________________
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the
securities of the Issuer (other than debt securities which are not
convertible into equity securities), directly or indirectly, within the
60 days preceding the date hereof
________________________________________________________________________
________________________________________________________________________
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period that
expires on the earlier of six months from the date of the closing of the
transaction herein and the issuance of a receipt by the Ontario Securities
Commission for a final prospectus qualifying the distribution of the Shares and
the Warrants, without the prior consent of The Toronto Stock Exchange and any
other regulatory body having jurisdiction.
Dated _______________ 2001.
X _________________________________________
Signature of individual (if Purchaser IS an
individual)
X _________________________________________
Authorized signatory (if Purchaser is NOT an
individual)
___________________________________________
Name of Purchaser (PLEASE PRINT)
___________________________________________
Name of authorized signatory (PLEASE PRINT)
___________________________________________
Official capacity of authorized signatory
(PLEASE PRINT)
AMENDING AGREEMENT TO THE PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
TO: GENETRONICS BIOMEDICAL CORPORATION (the "Issuer"),
San Diego, California, U.S.A.
================================================================================
___________________________________________________________ Special Warrants
USD 0.45 per Special Warrant for a total purchase price of USD _____________
The Purchaser holds the following securities of the Issuer:
____________________________________________________________________________
================================================================================
The Purchaser hereby acknowledges that certain terms of the Private Placement
Subscription Agreement (the "Subscription Agreement") entered into between the
Purchaser and the Issuer are amended as follows:
(a) the reference date of the Subscription Agreement is November 1,
2001;
(b) the total number of Special Warrants offered under the Private
Placement is 5,212,494;
(c) the Special Warrants are offered at a price of USD 0.45 per
Special Warrant;
(d) the proceeds of the Offering are USD 2,345,622.30;
(e) the Closing Date is November 23, 2001, or such other date as
agreed between the Issuer and the Agent;
(f) there will be only one Closing and no further sales of Purchased
Securities will occur after the Closing;
(g) the penalty provision outlined in the Terms under "Prospectus and
conversion rate increase" which sets out that in the event that
the Shares and Warrant Shares are not qualified for resale within
90 days of the Closing, the Purchasers will receive 1.2 Shares
and 0.6 Warrants for each Special Warrant converted, will be
deleted. Instead, purchasers of Special Warrants will receive a
refund of 20% of their total purchase price if the Qualification
Date does not occur within 90 days of the Closing; and
(h) the Agency Agreement between the Issuer and Canaccord Capital
(Europe) Limited is now an Agency Agreement between the Issuer
and Canaccord Capital Corporation, dated effective November 1,
2001, pursuant to which the Agent has agreed to purchase any
Special Warrants that are not sold to purchasers.
Subject to the amendments outlined above, the terms and provisions of the
Subscription Agreement remain in full force and effect.
The capitalized terms used herein are those defined in the Private Placement
Subscription Agreement.
EXECUTED BY THE PURCHASER THIS _______ DAY OF _____________, 2001.
EXECUTION BY PURCHASER:
__________________________________________________________________ X __________
Address of Purchaser (residence if an individual) ________________ Signature of individual
(if Purchaser IS an individual) X_________
Authorized signatory (if Purchaser is NOT an
__________________________________________________________________ individual)
____________________________________________
Name of Purchaser (PLEASE PRINT)
____________________________________________
Name of authorized signatory (PLEASE PRINT)
